This post is part of The One Hour Project, in which you can spend just one hour to put your finances in a better place without a big lifestyle change, through frugality or other financial choices.
This is something that’s well worth doing if you have consistently carried a credit card balance in the past and have never requested a rate reduction. It takes a bit of time (about an hour for a small pile of cards), but it can really save you some serious money in the long run. It’s pretty easy, too, as long as you’re willing to be a bit forceful over the telephone.
First, get out every credit card you have on which you have carried a balance in the last year. By “carry a balance” I mean you’ve not paid it off entirely and let the balance carry forward, earning interest. If you haven’t carried a balance in a while, the chance that they’ll reduce your rate is much lower because you’re not a client that makes them money.
Once you have these credit cards in hand, flip them over and call the phone number on the back. Punch whatever buttons you need to push to get to a human representative, then ask to speak to a supervisor. Most first-level people you speak to on the phone have no authority to raise your rate, so you must speak to a supervisor. If they won’t let you, tell them you are considering cancelling your card.
When you have a supervisor on the phone, request the rate reduction. Most of the time, they’ll just go ahead and reduce your rate; if not, tell them that you are considering transferring your balance (of course, this assumes you’re carrying one) to a low-interest credit card offering a 0% interest rate – this will often get the company to reduce your rate. If even this doesn’t work, suggest that you are having difficulty making the payments, which will often convince them. If these three tactics don’t work, politely say thank you and hang up.
Then, rinse and repeat for your other cards. Likely, the majority of these cards will wind up with some kind of rate reduction, and every one of these reductions will end up saving you money. Let’s say you have a card with a $2,000 balance that’s currently at 18.9% and you get the rate reduced to 12.9% – that’s a savings of $120 over the course of a year just from one phone call. With the average American credit card carrying household having a balance approaching $10,000, such an effort for an hour can save a lot of cash over the long haul.