7 On Your Side:Bargaining Interest Rates

Until recently, Rush Kittle felt powerless over the rising interest rates on his credit cards. He was afraid to ask for something better.

"I was worried about rejection," says Rush smiling.

But not anymore. When Rush learned that banks are in the mood to bargain these days--he simply picked up the phone and asked for a break.

Rush says,"I just flat said that I thought the interest rate was too high. And I'd like to get a lower interest rate and immediately the guy accommodated me."

Debt Smart.com Founder Scott Bilker says there's no time like the present to press for a lower interest rate on your credit cards.

Fierce competition is forcing card issuers to negotiate to keep their good customers.

"The market is just saturated with credit cards and banks--the only way they're going to get new customers is to steal them from other banks, and they know that. It costs them about $300 in marketing to get a good customer," says Bilker.

Bilker, who's written a book on the subject, says you need to be persistent when you call. If the first person can't help you, insist on speaking to a supervisor.

"You can say, 'Look, I've spent all this money, I've paid on time, I've made you guys a lot of money. I want a better deal,'" says Bilker.

Bilker says to improve your odds, come prepared with options. Shop for cards with lower rates, and save those balance transfer offers you get in the mail.

"You need a deal breaker. That's what you're going to do if the bank doesn't reduce your rate. You're either going to close your account, or transfer your balance," says Bilker.

Rush got a nine month promotional rate of less than two percent. That's down from a rate of more than 14% before he made the call.

A savings of about $100 a month in finance charges.

In nine months, he says he'll call and press them again for another deal. And he's not stopping there.

"It's given me the courage to call other credit card companies, which I'm going to do," says Rush.

No bank is going to advertise that they're willing to do this - so you have to take the initiative to make the call to lower your rates.

Those with decent credit who pay on time and carry a balance have the best chance of getting their rates lowered.

Christine Nelson reporting. cnelson@kltv.com