Friday, March 03, 2006

Lower your credit card's interest rate:

As discussed in my post yesterday, one way to reduce the time it will take you to pay off your credit card debt is to lower your interest rate. David Bach, author of The Automatic Millionaire among other books, says the best way to lower your interest rate is to just call the company and ask. He says when you speak with the first customer service representative simply ask them what your APR is, then ask to speak to a manager. When you speak with the manager tell them that you would like to have your interest rate lowered or you will be transferring your balance to another card (Use any card competitor: Citi Bank, MBNA, Chase, ect). Most of the time they will be willing to do this for you right away, because even if they lower the rate significantly, they still make plenty of money off of you. If this manager tells you no, ask to speak with their supervisor. Bach says eventually you will get someone who will lower your rate for you.

Well, I have tried this method, and failed. I have a PayPal Visa through Providian and they refuse to lower my interest rate. Every time I call they tell me that they review each customers account every 6 months and make needed changes to the account at that time. I have asked to speak to managers, their managers, and then their managers. No matter what I get the same scripted response. I asked to speak with the credit review department and told that they are not a "phoning department." So, playing stupid, I said "the credit review department doesn't have any phones? That seems strange." and the manager replied "Sir, I didn't say that, but they do not speak with customers. " so I proceeded to say thanks for nothing and hung up.

Now I do believe that calling and asking for a lower interest rate will work for many card companies, but as you can see, it isn't the end all be all of lowering your interest rate. So what is one to do when this happens. You have two main options, either suck it up and deal with it, or apply for another card and transfer your balance. If your card is maxed out, or close to it, it is unlikely that you will be approved for another card, so it's time to start paying it off as fast as possible. Then once you have half of it paid off, you are much more likely to get approved for another card.

You need to start this today, every day that goes by, you pay more interest to the credit card company.

4 Comments:

At 5:33 PM, Blogger Dave said...

1) How much debt are you in right now?
2) How many credit cards do you have?

Just curious. Another reason it may be more difficult for you to acquire a lower interest rate (if this story pertains to you of course) is the fact that you are a college student. Unless you are working full time as well, your income doesn't qualify you for the best cards out there. The ones with large cashbacks (5% gas...) and 0% BT rates. I suppose for now, you just have to deal with your current card(s). Be sure not to close them though! They will help your credit score in the future, something you will want to worry about in a couple years. :-)

 
At 7:54 AM, Blogger Mike said...

I do not have a full time job as I am a full time college student, but I do have a decent income for a college student. The card I have current has a high interest rate (20+%) so I figured they would at least lower 5 or so points. I'm not looking for the rewards cards, just one that has an interest rate of 15% or less.

 
At 8:03 PM, Blogger James Baker said...

Hi Friend! You have a great blog over here!
Please accept my compliments and wishes for your happiness and success!
If you have a moment, please take a look at my site:
loans center
It covers loans center related subjects.
Have a great day!

 
At 2:21 AM, Blogger Paul Adams said...

Hi Friend! You have a great blog over here!
Please accept my compliments and wishes for your happiness and success!
If you have a moment, please take a look at my site:
loans center
It covers loans center related subjects.
Have a great day!

 

Post a Comment

Links to this post:

Create a Link

<< Home