The following post is from Melissa Batai
2017 wasn’t a particularly good year for our family. One of our children had medical issues, and the treatments were only partly covered by insurance. As a result, we went into credit card debt to pay for some services. Luckily, things have stabilized, so we’re now looking into eliminating our credit card debt as soon as possible.
You may also find yourself facing credit card debt, whether it be for medical expenses, a job loss, or buying Christmas presents. Whatever the case may be, if you can set aside an hour of your time, you can lower the amount of interest that you’re paying every month.
Lowering Your APR
Our debt is spread over two cards—one that charges 14% APR, and one that charges 11% APR. I called the card company with the higher APR first. I explained why we had the credit card debt and that we were now trying to aggressively pay it down. I asked if they could help me make more progress by lowering the APR. The customer service representative didn’t even miss a beat and immediately offered me a 10.99% AP through July, 2018. She told me to call back and ask for the rate again in July.
This phone call took me less than five minutes and reduced my APR by 3%.
When I called the next company, they said they could not drop the rate, but they enrolled me in a special pay down program that they have. Basically, for every monthly payment that I make that is over the minimum, the credit card company will give me 5% of my minimum payment as a way to help me pay it down faster. So, if my minimum payment is $100 and I make a payment over $100.01 or more, they will apply an additional $5 onto my bill. True, this is not as good of a deal as the other card, but it does help me pay down my card faster.
I made sure that my credit would not be negatively affected by this program, which it won’t.
What to Do If You’re Unsuccessful
You’re not always going to have success when you call to negotiate rates. If the customer service representative you’re working with fails to negotiate with you, you have three options. First, you can politely end the call and try back in a day or two and see if the next person you reach can help you. That’s usually my first step.
If you call back later and still can’t be helped, then ask to speak to the loyalty or retention department. Chances are they will be able to help you adjust your APRl. Most companies would rather cut you a deal than lose you as a customer all together.
If you still have no luck, your last resort is asking for a manager. I’ve only had to do this once, back when I had just graduated college. None of the customer service representatives had been willing to work with me, but the manager not only reduced my APR but also gave me 10,000 points on my card, which would pay my annual fee and give me fifty dollars in cash. I was really surprised by her generosity.
If you have credit card debt, take a few minutes to call the company and negotiate your APR. You will likely be pleasantly surprised.
Have you negotiated APRs? If so, are there any particular strategies that work for you?