Lower Credit Card Rates
You can cut your credit card interest rate by doing one of these two things: reduce rates on your current cards or transfer your balance to better rate cards. Begin listing the APR you're paying on each of your current cards. Note if these rates are variable or fixed. You also need an idea of how valuable a customer you've been: how long you have been a customer, how much you add to your balance each month, how much interest they earn from your card use. Then:
- Call the customer service toll-free number and ask for a better rate. Let them know about preapproved offers you've received. 56 percent of callers get a reduction this way. The average new rate is one-third off their current rate!
- If ttey turn you down, try speaking to a supervisor to ask them.
- Explain that if you don't get the reduction you will likely close your account. You don't really want to resort to closing the account, but the credit company doesn't want you to either.
- Keep a log of whom you spoke to and what was said. If the promised rate cut doesn't materialize, you'll need a paper trail.
- Transfer your balance. If you're still unsuccessful, it's time to transfer by choosing from one of the many offers in your mailbox each month or by searching the Web. Two good sites: bankrate.com and cardweb.com
Lowering interest rates on your credit cards is ultra-important. But it's not the only debt to consider. By refinancing your other debts — your mortgage and your car loans, for example—you may be able to significantly reduce the rates you're paying and, thus, reduce your out-of-pocket monthly payments.
Refinancing your mortgage
If you can find a rate a half-point lower than the one you're paying now, consider refinancing your mortgage. Be careful to weigh the cost of refinancing (the closing costs and points involved in the transaction) against the savings you'd reap each month. If you think you'll be in the house long enough for the savings to exceed the cost, do the deal—if not, don't.
Refinancing your auto loan
Refinancing to lower the interest rate you're paying on your car loan is an even simpler transaction. You can hit the Internet or visit your local credit union and see if you can drum up a better rate than the one you're paying now. There are typically no closing costs and you generally don't extend your term. You simply give your business to another lender and pay less out-of-pocket each month. In other words, it's a no-brainer.
