The Butler Project

If you’re trying to reduce and pay off your debt, high credit card finance charges are a real thorn in your side. You’re probably tempted to transfer your balances, but wonder about short introductory rates, balance transfer fees and how balance transfers affect your credit score. Before you do anything, make a simple phone call to each of the companies with whom you are carrying a balance. Try Jean Chatzky’s script to get your interest rate lowered:

“I have [name of card] with you and my interest rate is [X] percent. I received another offer in the mail from [other bank's name] for [X] percent, but before I take it, I want to see if you can lower my interest rate instead.”

If the representative says they’re not authorized to do that, you say:

“Look, you and I both know that if I transfer my balance today, next week your bank is going to send me an offer to come back at an even lower rate. Why don’t you just save the bank the cost of that effort by giving me several points today?”

If the rep says it’s not possible because your credit card is at a fixed interest rate, you say:

“Actually, that doesn’t have anything to do with whether or not you have the ability to lower my interest rate. A fixed interest rate only means that my rate doesn’t vary with fluctuations in the prime rate. In fact, the bank can raise it on my account at any time by just giving me 15 days written notice. And the bank can, if it chooses, lower the rate today.”

If the rep still says they’re not authorized to do that, you say:

“I’d like to speak to your supervisor.”

Then speak to a supervisor and follow the above script again.

Now, keep in mind paying on time every month goes a long way with the credit card companies. If you have a history of making late payments, they get a bit snippy and reluctant to help you out in any way. But, whatever your situation, it never hurts to ask to have your credit card rate reduced.

P.S. If you do get your rate(s) reduced, find the smartest place to put that extra money. My first choice would be to apply it to my most expensive debt. If you feel the need to get a little money in a savings account, by all means, do that. Don’t think of it as “free money,” use it wisely to better your financial situation.