Like many Americans, I was shocked when I received my latest credit card bill and noticed that my interest rate had jumped from the mid-teens to over 21%!   I’ve had many years of experience with credit card companies, and so I got ready to call the customer service number.  I had mentally prepared a few pithy comments like, “I’ve got a mailbox full of zero interest rate credit card offers”, and “I’ve got a FICO score in the high 700’s and I’m not afraid to use it!”.  This is what I really did to get my interest rate rolled back:

I called the customer service number on my statement.  Once I satisfied the first representative that it was really me and simply told him I was unhappy with the rate increase,  he verified that I hadn’t been late with any payments and passed me on to the next higher eschelon.  I was greeted by a cheerful young woman who again verified that I could recite my name and address, and immediately proceeded to recite her speech about how she could reduce my rate.   All I had to do was listen to a litany of terms about the new rate and at the end, when she asked me if I wanted to accept the new rate, I had to answer “yes”.   That was it.  No arguing, no haggling, and no threats.   They had apparently increased the rates on all of their customers and had a system set up to reduce them for any customer who complained.

My rate was reduced back to about 16%, which is about where it had been.   It had drifted up from about 14% over the past five years, and was getting to the point where I was keeping an eye on the offers of balance transfers that were coming in the mail.  But I’m a serial procrastinator and there was so much chaos in the rest of my life that this issue just hadn’t risen to the level where I could no longer ignore it.  Until today.

My point here is two-fold.  First, it obviously pays to keep aware of the rates on your credit cards.  The banks and credit card companies have had a decade or more of reduced restrictions on their interest rates and fees, and with the current economic climate they’re looking for even more ways to boost profits.  I’d been hearing about this recent spate of rate increases on television, which is why I made a point of checking my statement again rather than just paying it and sticking the invoice in my files.  My second point is that if you have had your credit card rates increased, there is something you can do about it and it’s virtually painless.  Do what the experts always tell you to do: call the credit card company and complain.  Even in more normal situations, the card companies will almost always do something to satisfy you in order to keep your business.  I was shocked because I didn’t have to threaten to close my account or do a balance transfer this time, and not a little disgusted at the apparent policy of raising everyone’s rates and just waiting for complaints.   I’d mention the company by name, but my case is hardly unusual.

What’s it worth in real money to get your rate changed?  Well, let’s take the 5% reduction I received as an example.  On every $1000.00 of debt, that 5% is $50.00 per year less that you have to pay.   Lower rates mean you can pay your balance off sooner and your monthly payments will be lower.

I’m lucky because I don’t really carry an enormous amount of credit card debt, but nobody wants to pay more than they have to for anything.  As I said, I’ve had experience in calling the card companies to get late payment fees removed and such, so I was pretty confident that I would get some kind of rate reduction.  I was also armed with the knowledge that I had the means to pay the card off completely in a short time if I got turned down, which added to my self-confidence.  But the thing I want you to remember is how simple it was.   I saved myself a couple hundred dollars tonight, and all it took was a 5 minute phone call.   You can do it, too!

If you were a couple of days late with your last payment and you discovered you got socked with a hefty late fee, call the card company.  As long as your payment record is reasonably clean, they’ll almost always remove the fee.  If you know your payment will be late, call in and let them know and you’ll head off the problem.   As long as you’ve been a customer for a couple of years and your record is pretty good, you can have most fees waived.  So make the call!  In the future, I’ll be looking at more ways to find good deals on credit cards and related issues.