Dear Mary: In a recent column, a reader wrote saying it didn't work to call her credit card company to ask them to lower her credit card's interest rate. Your response reminded me that I had a 14.99 percent interest rate on a Visa card with a credit union to which I have belonged for 32 years.
I made the call and simply asked for a review of my account. I went on to explain that I wanted to pay off my card without intervention of a third party, but with my high interest rate, I wasn't making much of a dent in a very high balance.
I got an immediate response by email with an offer of 10.99 percent. I accepted and asked if I changed the rewards card to a regular card, could it decrease the percent (I had heard in the past it could reduce the interest rate by a percent). To my surprise, they said if I went to a premium Visa or MasterCard, that it would decrease to 8.99 percent. Needless to say, I am ecstatic and so thankful for your reminder to keep trying.
Thank you for all you do to help us work through the stresses of financial bondage. -- Sandy O., email
Dear Sandy: Good job. I applaud your courage to ask your credit card issuer for a lower rate. The difference between 14.99 and 8.99 percent is huge. Expect your monthly minimum payment to go down considerably to reflect the lower rate of interest. I suggest that you ignore the lower payments; instead, make the largest payments possible. That's the way to take advantage of a lower rate, as more of the amount you send each month will go to reduce the balance owing. You'll knock down that debt to $0 in no time and save as much as a $1,000 in interest.
Dear Mary: Recently a friend was over and I was opening my mail. She happened to see one of my credit card statements. She screamed, "OH MY GOSH!! YOU HAVE A $8,000 CREDIT CARD BILL?!" I said, "Oh, yeah, it adds up over time. But that is just a statement, I make payments."
She then replied, "Honey, I love you, but if you think that bill is just a statement, you are dumber than you look right now. That is a BIG FAT BILL any way you want to look at it!"
I was so embarrassed. She grabbed my purse, found the card and cut it up. I know it will take a while to pay my debts, but I have made a decent start. And I have good reinforcements to help. I just wish I would have taken your advice more seriously years ago when I first found you. -- Kimberly C., Texas
Dear Kimberly: I only wish I could have been a fly on the wall to witness that dialogue. I would have been cheering. You are fortunate to have a friend who cares enough to exercise that kind of tough love. I have no doubt that you are going to make it. I know of at least two people who will accept nothing less from you.
Mary invites questions at firstname.lastname@example.org, or c/o Everyday Cheapskate, P.O. Box 2099, Cypress, CA 90630.