Reducing your credit card interest rate; Just ask

[petek]

Here's a link to a news piece that the CBC Marketplace program here in Canada broadcast awhile ago though I can't seem to find the video link. What they did was have some shoppers at a Winnipeg mall call their credit card company and read a script asking for them to reduce their interest rate because they've been good customers and are seeing other cards offering much lower rates and may switch. In nearly all cases the people got their card rates dropped substantially all from a simple phone call.

In a similar vein I called my auto insurance asking for a reduction in my motorcycle insurance and in less than 5 minutes on the phone my premium was cut in half.

http://www.cbc.ca/consumer/story/2008/03/07/credit-cards.html

 

[perc-o-prince]

I've done similar to what was described above, and it's worked most of the time.... except with Capital One. I'm gearing up for another try at them, though, and we'll see what happens.

I've also taken advantage of the checks that the credit card companies send with the statemnt. For example, when I bought my current vehicle a few years ago, I was offered $1500 incentive cash-back to finance through GM. But, they only approved me for 6.9%. Fine! I took the financing and their $1500, then flipped the payoff over to one of my credit cards with a 3.9% "until it's paid" check. Cut the interest just about in half, and I'll have it paid off sooner too!

It's all about creativity!

Chuck

 

[jons1077]

Use low-interest transfer offers

Tony and I have racked up quite a bit of debt with remodeling the condo,etc. Some of the cards ended up having high interest rates. We are paying high payments towards them and paying on time so there was no need for the high rates. I simply juggled them a little and used transfer offers that lowered or even took away interest all together on every card. We've been paying them down a lot faster since.

 

[tolivac]

I tried--"just ask" on mine-NG-but was able to get a lower interest rate "paydown Loan" to pay the credit card .Now I have closed that account!I don't use the card unless absolutely necessary!I keep my remaining card locked up or froze up in the freezer in a container of water.the paydown loan paid down other accounts too.That is another option-most banks offer it.

 

[iheartmaytag]

Problems with credit cards

Perk-o-prince "Chuck"

That was very creative how you flipped your outstanding debt to your credit card. I know I am new here so please don't take my statement as butting in; As a former loan officer/debt collector let me caution others on this just a bit if I may be so bold.

A auto loan is a simple interest debt, or a sight note. You only pay interest on the amount of the unpaid balance you owe. When you post a payment your accrued interest is paid first along with any fees and then the remainder goes to reduce your principal.

With a credit card they can compound your interest which if you are not careful in making sure your are in a positive amotorization you could lose your advantage.

Another caution, if you apply for another loan while this balance is outstanding some lenders will look at the unsecured debt ratio as a negative indebtness. Whereas the auto loan, a secured debt, is a positive debt adding to your gross worth.

You are absolutely correct it is always best to take the rebate in the form of reducing the principal. If something happens and you don't keep the vehicle for the term of the note you are ahead the $1,500 from the start. If buy down the interest rate where you take a 1.5% in leiu of a rebate you could wreck the car on the way home and you are out the money.