GeekLimit

How to lower your credit card interest rate

Posted by The Technocrat | Filed under Geeky

If you’re like me, you’ve probably noticed that your credit cards charge you between 20-30% interest. This is crazy. What this means is that for a 30% interest rate (Capital One), for every $100 I have on the card, they charge me an annual $30, billed monthly. Over the course of a year, I could be paying $2.50 per month for every $100, just to pay the interest. That’s $25/month per $1000!

Since the average American has about $8500 in credit card debt, that means they will pay about $212.50/month just to stay even. That’s $2550 per year!

That’s ridiculous, and as with all things ridiculous, it set me out on a quest.

The first thing I did is call up the credit card company and say that I just got a great deal in the mail for another company’s credit card (I didn’t), and although I really liked being with them (I don’t), I can’t afford not to go with the new company’s rate of 13%. A short conference call with a supervisor (probably just filing their nails), and they ‘offered to match the other company’s offer’.

Deal. The average American’s payments (just to stay even) just went to $92.08/month and $1105/year. 2 minutes on the phone and a little bluffing just bought $120.42/month, or $1445.04.

The key here was picking a rate that didn’t sound too ridiculous. I did some research online and found out that Capitol One operators are allowed to authorize rate reductions down to 13%, but any more than that takes special oversight. Since a manager would try to keep me at the same rate (read: “would know I’m bluffing”), I wanted to rely on the minimum-wage operator who is more likely to give me a break.

It worked.

Comments (0) | January 2nd, 2006