Transition Guidance

Two credit card offers in one recent week stood out from the usual flood of "already approved" pitches. The first was from a telephone solicitor trying to sell me a VISA with a 12.9 percent interest rate. Then, the next day, a piece of junk mail arrived, offering a VISA at 11.9 percent.

Both were from the same bank, Chase.

If it seems that banks are going to amazing lengths to get customers, even competing with themselves, they are.

Push the Right Buttons:

Banks offer a huge variety of inducements to strengthen their foothold in the multi-billion-dollar credit card business, including "special" interest rates, services and forgiveness of annual fees.

And this smorgasbord may be even more variable than it looks, many credit card experts say. For instance, consumers can ask a service representative for a better rate than they are now paying on the same or a competing card.

By now the variable-rate credit card is a familiar product: A bank offers a low, or "teaser," rate to get a consumer to accept a credit card, then raises the rate after a certain time. The initial and subsequent rates depend on the consumer's credit history.

The increases are not always predictable. In some cases, banks can raise even a fixed rate with as little as 15 days' notice, according to Money magazine.

What many consumers don't know is that a bank can also be convinced to lower a credit card rate. But they have to ask for the bank to do so first.

"There are numerous rates available," says Ruth Susswein, executive director of Bankcard Holders of America, a credit information group based in Salem, Va. "If you are a valuable customer, the issuer will want to keep your business."

Generally, card issuers are likely to embrace a customer who uses the card frequently, carries a balance and never misses a payment. But bargaining can work even for a new customer, says Linda Sherry, editorial director for Consumer Action of San Francisco.

For instance, she says, someone who opened an account based on its teaser rate can call the issuer when the rate is scheduled to rise and ask to have it kept low. If the bank declines, the consumer should make it known that he or she will close the account and go elsewhere.

In fact, people who have held a card for a long time may have a hard time getting their rate lowered, Sherry says. The reason: "You may already have the best rate they give."

Not All Customers Are Right:

The response you will get to your request for a lower rate depends on a number of factors. One is how aggressive the issuer is in maintaining its share of the market. "Some may work with you, some you may have to threaten, some don't do it at all," Susswein says. "There is no set formula."

Sherry says banks are willing to talk with "excellent" customers, but with competition so keen that card issuers already are working on a fine margin, they don't have much room to negotiate in most cases.

The card issuer will check to see how much money it is making from your credit card, Susswein says.

If you rarely use a card, keeping it in reserve only for large purchases, emergencies or travel, don't expect its issuer to be too interested in rewarding you to keep your business.

Neither do card issuers particularly want to negotiate rates with a customer who uses the card, but pays off the balance each month.

"A valuable customer is one who pays on time, but not in full," Susswein says. "That type of customer is paying interest. The issuer is making money from that customer."

Even if you want to stay with your current issuer, but with a renegotiated rate, you might want to see what other banks are offering. That will give you an idea of how much you can ask from your card issuer.

Typically, the rates for variable-rate credit cards are based on the prime rate - the lowest rate available, reserved for a bank's best customers - plus a margin the bank sets, anywhere from 0 to 10.4 percent, according to Money magazine.

You might even want to show your bank another institution's offer as leverage in asking for a lower rate.

Rates are not the only thing subject to negotiation, however. Card issuers sometimes will waive annual fees - if you ask.

As with the rates, that depends on the kind of customer you are. It also hinges on the type of card.

For example, cards that offer frequent-flyer miles almost always charge an annual fee, which may be worth paying if you are earning enough miles to cash in for airplane tickets.

But bank cards that offer other services or inducements, such as rebates, usually have no annual fee.

Consumers interested only in a card's interest rate - not in the myriad services many offer, from travelers' insurance to towing and road service - might have to give up some perks to get an economical card without bells and whistles, Sherry says.

Pick Your Battles Carefully:

Timing always counts in negotiations. And now might not be the best time to be a free agent with your credit cards, consumer advisers say.

Personal bankruptcies and credit card defaults are at all-time highs. Banks that issue credit cards are not making as much money from them as they were. That means they have less breathing room.

In fact, Susswein says, "There is more negotiating going on with customers who are having trouble repaying their bills."

Card issuers can penalize a customer who falls behind in payments, but the reaction depends on the company, Susswein says. "Some of them are saying they would like to work with people and make sure they can solve their financial problems."

But in general, she warns against trying to use a bad credit history as leverage with a lending institution. "If you suspect you are a bad customer don't try" to renegotiate your rate, Susswein says. "You don't want to call attention to your record."

But even if you have a poor payment history, you don't have to accept changes in the terms of a credit card, consumer advocates say. Complain immediately or take your business to another issuer, Sherry says.