I finally made the dreaded calls to the credit card companies to try and lower my interest rates. I’ve been saying I was going to do this for weeks. In fact, in a comment on the Snowflake Revolution, I promised I would do it that day, but wimped out. I don’t know why these calls seemed so hard. Partly, I think, it’s because I don’t really like making calls to strangers, and, partly, it’s because I had this irrational fear that the evil credit card companies would give a black mark in my permanent record for even asking. However, the Motley Fool’s Get Out of Debt seminar spurred me on. After finishing Lesson 1 yesterday, I sat down for Lesson 2.
Lesson 2: Six Steps to Eliminating Credit Card Debt
The Fool’s site offers up the typical advice about how to plan your pay-off order and how to stop using your cards. Again, I could have easily said, “yes, yes, I’ve heard all this and have put it into practice.” Then I got to Step #5: Reduce the Interest Rate. That little niggling voice in the back of my head said, “yeah, silly, you’re really supposed to make those phone calls!” Still, I hesitated.
In the downloadable workbook, the Fools give you a script to use when you call the credit card companies. Suddenly, with a script, the calls seemed much more manageable. I used to call alumni from our university for donations. That was the one point in my life where talking to strangers on the phone was actually fun, mainly because we had a whole script to use. I was great at taking the script, putting my own spin on it, and making it sound real. Perhaps the hidded actress in me had her moment to shine. So, with the Fools’ script in hand, I felt in more familiar territory.
Making the Call
I actually made two calls, but my title for this post had such a nice ring to it. With the first call, I got nowhere. I tried Card #3 with a balance of $3545.77 and an interest rate of 17.24%. I was a little nervous, but took a deep breath and rattled off the first part of the script about a better offer, how I didn’t really want to leave because of the great customer service, but was going to have to unless they could lower the rate. The person on the other end quickly transferred me to a supervisor, just as the script said he would. I thought I was totally in business. So, I repeated the spiel with the supervisor and got this response: “We just lowered your rate from 17.99% to 17.24%, so you’ll have to wait six months to try again.” What?? I tried my threat to leave, and she said fine. End of call. 0.75% in six months is all that I can expect after years of on-time payments? I hung up pretty discouraged and almost didn’t try the next one.
The Magic Call
You can see that this story has a happy ending. Next up, I tried Card #2, which has a rate of 19.24%. I decided to try it since it was the next higher rate. After another deep breath or two, I dialed them up. In the spiel, you say that you have an offer for a new card with a 5.9% introductory rate, hoping to get your rate down to 11% or 12%. So, the woman on the other end pulled up my account and said, “Well, the best we can offer you is prime + 0. Prime just went to 6.5%” I almost fell out of my chair! I made her repeat that they could give me 6.5% and calmly said that would work while doing a seriously huge happy dance inside my head. Then, she offered to raise my limit by $1,500 and asked if there was anything else she could do. I said, “do you have any balance transfer offers?” And, she offered up 0% for nine months and no transfer fees. So right then and there we transferred over the full amount from evil Card #3. Now, all payments will go to the 0% balance first, so my original balance with them will sit at 6.5% until I pay off the $3,500, but at the rate I’m going, I think nine months is really do-able. Even with that caveat, I’ll be paying $125 in interest rather than $996. My plan now is to pay a big chunk with this payday on Card #1 and then call Card #2 back up next week and ask to do one more balance transfer. In the end, by making those darn calls rather than burying my head in my sand about my credit card debt, I’ll avoid having to pay roughly $1200 in interest.
Hooray for the Motley Fool!!
What I Learned
Of course, not getting discouraged was the big key to my success. I could have easily said, “eh, this calling for rates thing doesn’t work” and ditched the whole thing after that first bad call. Also, Card #2 is with my brick and mortar bank; I actually use it for on-line purchases, and I have a low balance compared with my credit limit. I think all this worked in my favor, while Card #3 saw that I have just been making small-ish payments and am near my limit. They probably figured I was theirs for life. It does make sense that you’ll likely get your best deal from the card that has the most reasons to keep you. In any case, if you’re dreading the “lower the rate” call, I’ve got over a thousand reasons why you should do it! Good luck! I’d love to hear from you if you do give it a try.