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Pay Down Your Debt Challenge

4 Little-Known Secrets About Credit Card Companies

You have more leeway with creditors than you think

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En español | While it may seem like you're at the mercy of credit card companies and others that you owe, in reality, you probably have more power and leverage than you suspect when it comes to dealing with creditors. 

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Once you discover a few profound truths about credit card companies, you'll not only more successfully juggle your financial obligations, but you'll also know how to maximize your credit cards for all they're worth.

Here are a few little known secrets about credit card companies that a banker isn't likely to tell you.

They're Desperate for Your Business

Even though they make huge annual profits, banks are reeling financially.

For starters, it's costly for banks to market to consumers and attract new clients. TV and print ads are expensive. So is direct mail. Only a tiny fraction of people open junk mail or reply to offers for new credit cards and balance transfer deals.

Plus, because of a host of regulatory changes over the past year or so, and new laws such as the CARD Act, (officially called the Credit Card Accountability, Responsibility and Disclosure Act), which governs credit card issuers, banks are set to lose tens of billions of dollars in yearly fees.

debt challenge secrets about credit card companies woman with stack of credit cards

— Photo by: JGI/Tom Grill/Blend/Corbis

All of this has made banks a bit more desperate to drum up new sources of revenue; a fact that puts individuals with stellar credit ratings in the driver's seat. If you have excellent credit, banks are falling all over themselves to compete for your business — especially when it comes to offering credit cards with travel rewards, cash back offers and other perks.

"The credit card industry," says Curtis Arnold, founder of, was "on a roller-coaster ride in 2010.

"The first of the year was filled with doom and gloom and there was a lot of talk about higher rates and fewer perks." As the year ended, however, people with good credit began getting attractive credit card offers in the mail, with banks going all out on rewards cards promotions in particular.

Next: Creditors will give you a break sometimes. >>

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