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Can you reduce your debt faster even on a fixed income?

Do you have credit cards with high interest rates, that it seems as though you are barely getting ahead on your debt?

How do I call my credit card companies for a lower rate?

When my husband and I were first married, I sat down and watched the Oprah show one day where they were teaching on how to get lower rates on your credit cards, and loans, simply by making a phone call to the bank, or phoning your credit card company.

It got me excited, because at that time, my husband and I were newly married, and knee deep in debt.

When ever you have a lot of debt, it can feel emotionally crippling, and impossible in the moment to climb out, especially when you are looking at large numbers on your financial statements.  This can be especially challenging when you have a very tight working budget already.

On the show Oprah suggested to phone your companies and ask for a lower rate.  S0, at first, I was a bit overwhelmed, so I waited until my husband was home, and we thought together we would give it a try.

Here are a few tips we learned through this experience……

Tip 1 -Know What Other Companies You Can Turn To For A Second Option

The biggest successful tip that I would like to pass on, is to research your available options of obtaining other credit cards before you phone.

A caller who knows what they want, is a caller informed with specifics.

In essence, you want to be able to have some back up plans before you make the phone call to the credit card company. This will give you negotiating power with the representative of the credit card company of your very specific plans of moving to another company if you cannot get a reasonable low rate.

The last thing you want to do is make a phone call without checking if you are able to be approved for a lower rate somewhere else, and end up looking stupid on the phone.  That was the number one reason why we failed on first attempt.

Tip 2…  Making That Phone Call

We wanted to combine our debt, and lower the interest on our high interest credit cards, and possibly score with one low rate card.  Our goal was to pay off debt fast, by having the majority of our debt with a low interest credit card.

Our first attempt phoning wasn’t a success.  We did have a great credit history of making our payments on time, but when we phoned, they said NO!. Maybe at the time, Oprah’s show prompted many people to phone, but the fact is, we did it on a whim.  Not only did they say no once, they said no over and over again, and didn’t really care that we would switch to another credit card company. We talked to multiple people during that phone call and the answer was still no.  It was a little disheartening, and at that moment, I thought every call would be like that.   Though I was so badly wanting to see our debt disappear, …I wasn’t willing to give up.

A few days later we closed our account, winded up finding a different lender at that time which offered us zero percent for 1 year, and then a very good rate after the year ended.  I felt the company was so rude, I was ready to go somewhere else, and I did.  I was happy to find the new company, and over that year, we applied more than our minimum payment.

Fast forward a year….

After that year was up, we phoned again asking for a rate reduction. The answer was still no.

I was persistent in telling the rep that I wanted to talk to the manager. “The manager isn’t in” she said. I responded back, that there had to be a supervisor that I could talk to. Everyone has a boss on the floor….right? So, the manager got on the line, and we told him we were making double payments and wanted to just pay off the debt.

We were hopeful of being able to do it in one more year. Not mentioning any specific details of the rate we wanted, he put us on hold, and he came back on the line offering a rate better than we were expecting. So, it is a very successful strategy, and it worked.

I believe the key to our success the second time around that we had a good history of paying off our debt, and were eager to pay the debt off.  We had a plan of paying it off, and had specific interest rates and specific companies we were ready to take our business to.  We asked to speak to someone who had more authority to make decisions than the phone rep, and that also worked well.

Some tricks of the trade:

-Know Your Bargaining Power– Is your payment history great? Is your credit score high? By getting an annual free credit report, it will tell you each month’s status with every bill you pay.  If you don’t have good credit history, work with other positives you can offer them.  If you do promise something, be sure to keep your word.  Otherwise, tell them what you HOPE to do.  A rep seeing a client who is excited, and willing to make their payments on time is often better to work with than the ones they have to hunt down every month to pay their bills.

– Ask for the “Retention Department, instead of “Customer Service” It was one tip Oprah said on her show, that has been proven to work in the past.

– Don’t Threaten To Leave And Have Nothing To Back It Up With– Be sure that if you are going to threaten to leave, give them specifics. I am sure they get tons of people calling in with “I am going to leave you” so they plainly say no, gambling with the fact you may, but most of the time people really don’t.

Do your research on all the available options of low interest rate credit cards, because if they do say no, you are ready to switch, or at least tell them that you are switching to XXX.  With credit cards, there is always tons of offers where you can keep transferring your balance to something better.

– Get Tough, And Sound Professional. Tough means that you are armed with the information that you can follow up with your threats. Why should they give you a better rate? “I have perfect payment history” “Capital One is offering me 2% for the first year and XX% after, I am ready to transfer my balance, and I wanted to know if you can beat that?” Don’t ever insult and act negative with reps.  A collected caller is someone who is confident that they have plenty of options, not someone who is abusive with their words on the phone.

– No Doesn’t Mean “No” Right Away. Work with the person on the phone. “Why is my credit card rate so high, when I am approved for other cards at much less?” Now if you are going to say that, they are going to ask you to tell them the details. So don’t lie, tell them the names of the companies, but don’t get too specific. Remember, you want a lower rate or some competitive fixed rate.

– Know When To Stop–  When you get your desired result, don’t ask for the cake too. “I also want no fees, and no late payments, and no annual fee, beat that or I am going to leave

– Stay Perfectly Quiet When You Are On Hold-  Many phones that put you on hold can hear what you are saying, even though you cannot hear the rep.

  • Meranda Devan

    Do you have any debt tips to share?