From my column today on InsideStl:
Most personal finance bloggers focus on educating people on shit they don’t care about. Few people follow through on their advice because the message is not reaching them. It’s more important to teach why being frugal makes sense, than it does to simply teach about being frugal. If you understand that by being frugal you will be able to save for a down payment on a lake house that you can be partying at in two years, people will look at their purchases more closely. Below, I will show you how to cut out $100’s of dollars in interest charges on your credit cards this month by following by teaching you how to call the credit card companies and get your interest rate lowered.
Believe it or not, if you simply pick up the phone and call your credit card companies and request a lower interest rate on your card, you’ll probably get it. Below, I’ll show you exactly what I said to my credit card companies that immediately saved me over $25 a month and $300 in interest charges in the first year, on just one card alone.
Looking at my credit card interest rates was a bit surprising, one card in particular that I had was a citicard. Initially the interest rate on the card was around 10%, however, when I looked at the current rate I was being charged, it was nearly 27%. I was being duped and I was pissed. If I simply made the minimum payment, it would take me 24.5 years to pay off and I would pay about $10,500 in interest charges. After a simple phone call and a small threat (which I will show you below exactly what I said) I got my interest rate dropped down to 6%. If I made the minimum payments it would take me 20 years to pay off and I would pay about $2,200 in interest charges. That’s a difference of over $8,000 in interest in total, or a difference of over $300 in savings in interest charges each year. That’s $25 more in my pocket each month for a five minute call. If you’ve got a few credit cards and apply these tactics that could result in 100’s of dollars in savings right away.
I called the customer service department and here’s exactly what I said:
FinanceDad: I would like to inquire about getting the interest rate changed on my card.
CitiCard Customer Service: Sure, one moment please.
They connected me to a credit rep.
CitiCard Customer Service: We understand you would like to lower your APR. Certainly we want to keep you happy sir, let’s see what I can do for you. We have submitted the request and will get back to you shortly.
About 3 days passed and I heard nothing back, so I called again and asked for the status of my request. Here’s what I said.
FinanceDad: I inquired about lowering my APR a few days ago and I haven’t heard anything back. I want my APR lowered right now or I’m going to initiate a balance transfer to another card and stop doing business with you all immediately.
CitiCard Customer Service: Sir, please hold. OK sir, we are sorry about the inconvenience and delay, your APR has been lowered to 6% effective immediately.
FinanceDad: Excellent, thanks!
It really was that easy, and it took less than 5 minutes of my time. Be aware that this doesn’t always work, especially on department store cards and some other cards, but it’s certainly worth the 5 minute call to see if you can get it lowered. Even if you threaten and they don’t change the terms, you’ve got nothing to lose, it’s not like they will or can close your account. They don’t want to lose your business. Try it now and let me know how much money you save right away.
Here’s a link to the calculator I used to compute my savings so you can do the same.
My next column will appear tomorrow and my columns usually appear here on Tuesday and Friday.