How to lower your credit card interest rate

17 September 2010 215 views No Comment

BY: MARK MARJI

Do you want to save $1,000 in 15 minutes? All you need is a telephone and a credit card. That’s right; your credit card can actually be one of the most powerful tools in your financial arsenal. Since credit card companies want to make a profit off of your spending, every unpaid dollar feeds their bottom line. Debt-elimination expert Scott Lundteigen, gave Sway tips on how to take advantage of your credit card company’s interest in you.

1. Make the call
“The first thing you want to do is call the number on the back of your credit card. Tell whoever answers that you would like to reduce your credit card interest rate. Most people don’t realize that this simple phone call can end up saving you thousands of dollars over a few years.”

2. Make the pitch
“If you meet resistance, don’t argue. Let your existing credit card company know that you have other offers for an introductory interest rate of 4.9 per cent (or whatever you have in your mailbox this week) and that you’d hate to move your business elsewhere without giving them a chance to match the offer. If they say they cannot help you then politely ask to talk to their supervisor. And repeat the same comment. You can keep asking to speak to the next supervisor, because they can reduce your rate progressively as you go up the chain.”

3. Make the deal
“They may only offer you 6.9 per cent which is a big change to your bottom line. You probably reduced your rate by about 10 per cent. If you held a debt of $5,000 over six months, you’d save $250 in interest for a 15-minute phone call. If you made four phone calls like this, the one hour you spend on the phone could be worth $1,000.”