If you are like most Americans your average credit card balance is around $8500 according to a CNN article (http://money.cnn.com/2002/09/24/pf/banking/q_rates/ ). Just to pay it off in 3 years, you will be making monthly payments of $307.50 per month with an average interest rate of 18%. Now that’s the bad news for those of us in debt. Here is the good news:
In a survey conducted by the Public Interest Research Group (PIRG), 56 percent of those surveyed got their credit card rates lowered simply by asking their lenders to do so. In the current environment, if you have reasonably good credit, McKinley said, you should be able to get a rate between 10 percent and 11 percent.
My brother Mike can attest firsthand of how to get lower rates with creditors. When his credit card balances reached an all-time high of $14,000 he was in dire straits. He called each of the various credit companies just asking for a lower rate. It really is that simple. In this economy, many financial institutions know that the consumer wants the lowest prices for their hard-earned money. By making 4 four phone calls, my brother Mike saved $641 through the following four phone calls:
Old Rate: 18%
New Rate: 12.9%
Old Rate: 22%
New Rate: 14%
Old Rate: 19%
New Rate: 11%
Old Rate: 22%
New Rate: 11%
* assumes paying off the balance in two years. Savings are greater for longer payoff term.
If you merely have the average balance of most Americans, four phone calls could easily save you $641 per year or more if your balance is higher.
Let’s have some fun with this:
- 4 phone calls = savings of $641 per year
- Savings per phone call = $160.25
- Time spent on each phone call 15 minutes
For every phone call you gave yourself of raise of $13.35/month or $53.41/month for all four! How many of us can say that for every four phone calls we make it gives us a raise of $53.41/month?
Beating The Credit Card Companies At Their Own Game
If your credit card company plays hardball or will not give you a lower rate, here are some excellent comments for those belligerent customer service reps:
- “I just received an offer from your competitor for 9.9% fixed rate. Can you match that? If not, I will be taking my business elsewhere.”
- “Your rate on my card is currently XX%. What can you do for me on that rate?” Then STOP and don’t say a word. Let the silence scare them and know that you are serious.
- Use one of the temporarily low rate introductory offers for 6 months. These rates are usually REALLY competitive, but be careful. They often jump to a much higher rate after 6 months if the balance is not paid off.
Also, you want to ask yourself, “How bad does this credit card customer service rep want my business?” If the person you are dealing with is not acting motivated or enthusiastic about getting your business, you need to deal with someone else. Either politely hang up and call back to get another rep or if you at the store simply walk away for a few minutes and find a different Representative who really does want your business.
Do NOT be intimidated when dealing with these people. Yes, these banks that issue these credit cards are often $30-billion companies or bigger, but you aren’t trying to BUY THE COMPANY. Hello??!! This isn’t Warren Buffett or Bill Gates on the other end of the line….you are talking to a customer service rep for Pete’s Sake!!!!! He or she might be at the bottom rung of the company and HATE CREDIT CARDS AS MUCH AS YOU DO. Here’s my point: I will guarantee you that her boss at the credit card company would gladly lower your rate in a heartbeat than lose your business entirely! Think about it.