CreditMattersBlog.com Rewrite: Cut Your APRs and Increase Your Limits (all in one phone call)

This is one story that is in desperate need of a rewrite. And, so, I'm doing that today. You can find my original story here (link). You can compare it with my story from today. Should be instructional.

When I originally wrote this story in July, I was extolling the virtues of calling creditors and asking for both an APR reduction and a credit-limit increase in one call. Today, that advice isn't as strong.

Instead, customers should be reticent about contacting their credit-card issuers and asking for anything. Given this crazy environment, I am more inclined to stay off their radar screens altogether. Still, if I did call, I wouldn't be too worried about asking for APR reductions. But I wouldn't be asking for credit-limit increases. Nope.

Where I used to call and ask for a limit increase every four to six months, I don't call at all now. I'm keeping a low profile and playing defense. What I grabbed during the salad days of 2006 and 2007 is still with me. I'd like to keep those limits intact. I don't want my creditors reevaluating my limits -- and so I am not calling them and bringing attention to myself.

If you are interested in an APR reduction, though, it's easy to do. Call the 1-800 number on the back of your credit card. When you get a customer service representative on the phone, simply ask if your account is eligible for an interest-rate reduction. Here's what you say: I'm a good customer; I have a great payment history; I'd like to have the APR reduced on my credit card. The service rep will be able to adjust your rate right on the spot if your account is eligible. The worst thing that can happen is the rep will say no. You have nothing to lose. Historically, the companies that I have found most receptive to APR changes are Citibank and Bank of America. Chase is the most stingy. Given the changing environment, though, you may find that more card issuers are reluctant to reduce your APR. Oh, well. Give it a whirl nonetheless.

By the way, you shouldn't expect low APRs on some of your rewards cards. Those cards often charge higher interest rates. You may already be at the lowest rate for that card, even though it's relatively high.

In my previous story, I talked about asking for credit-limit increases at this point. For now, though, I tell my friends to hold off on those. When the credit environment gets a little easier, then they can go back to working on increases. That said, if you absolutely need an increase -- and your spending and payment history warrants it -- then by all means call and ask.

If you do decide to ask for a credit-limit increase, remember these tips: some card issuers are unable to give you a limit increase without pulling a new credit report (Chase, in fact, is notorious for pulling a credit report that results in a hard inquiry). I'd avoid those.

Bank of America, meanwhile, allows you to request a credit-line increase online. It will be a soft inquiry unless Bank of America tells you otherwise (its disclosure says that it will not do a hard pull without first notifying you). If you do call about an increase, be sure that the customer-service rep understands that you do NOT want an increase if it's going to result in an inquiry that dings your score. At most, you're looking for nothing more than a soft pull -- which is an inquiry that does not result in an inquiry that hurts your score.

When it comes to credit cards, I'm proactive. If I want a lower APR, I call and ask. If I need a limit increase, I call and ask for one of those as well. My only caveat is that if you don't need a limit increase, you should avoid asking for one. With so many card issuers looking to slash limits (rather than build limits), this isn't the time to get on a card issuer's radar screen.