How to Lower Your Credit Card Rate (3:06)
Is your credit card debt keeping you up at night? Are your bills giving you high blood pressure, ulcers, headaches, or back pain? If money woes are affecting your physical health, it’s time to take back control of your finances. Nicole Lapin, a personal finance expert, shares the simple tips you can try today so you can save hundreds of dollars on your high interest rates and fees and breathe easier by tomorrow.
Negotiate Your Credit Card Interest Rate
One of the most important things you can do to make debt manageable is to negotiate any fees or rates. If credit card debt is piling up, call your credit card provider and ask for a lower annual percentage rate (APR), lower monthly payment, or lower fee. Inquire about the rates given to new customers and if it is lower than your current rate, ask for your rate to be matched or reduced. Point out any good records you have with the company, such as how you make payments on time or regularly keep a low balance. If initial conversations with a representative fall short, ask to speak with a manager and be clear that you are willing to walk away from the negotiating table. Companies will want to keep you as a customer instead of losing you to a competitor, by giving you what you asked for or more. To get the most out of your credit card company, negotiate up to twice a year, in the beginning and at the end of the year, and your efforts will definitely pay off.
Save Hundreds on Your Cell Phone Bill
Do you really know what you’re paying for on your cell phone plan? Analyze your monthly statements and determine whether you need to and should be paying for an extra phone line, a separate data plan, or international calling fees. As with your credit card bill, negotiate with a manager, research what competitors are offering and ask for any lower offers or for offers to be matched and be willing to walk away. The bottom line here is to look for any savings where possible and make sure you’re actually using what you’re paying for.
Cut Unnecessary Subscriptions
Are you subscribing to services you barely use or aren’t even using at all? Whether it’s for cable, magazines, or a gym membership, figure out what you’re taking advantage of and what you’re not. If you only watch the same three TV channels each week, swap out your cable subscription for one-time movie rentals or stream your favorite programs online at a lower rate. The average premium cable rate is around $1,200 a year but if you only rent movies for $2 per movie every month, you would only be paying $24 for your movie habit, saving over $1,100 a year. Unsubscribe from magazines that you don’t read and look for lower-cost alternatives for your expensive gym membership if you’re not making regular visits.
Set Up an Auto Transfer Savings Account
Put aside money without thinking about it by setting up auto-transfer from your checking account to your savings account. Start with a manageable amount like $25 a week and adjust accordingly based on your personal budget. When you’re at the store, pay attention to the amount you have saved or look for the amount at the bottom of your receipts. Then, transfer that same amount back into your bank account to save even more. If you can, skip using your account’s debit card and stick to cash for daily purchases. You won’t be tempted to use money that’s not there and you won’t miss it!
Stop Charging Small Purchases
Due to high interest rates, small purchases can balloon into large debt. Every time you make small purchases and don’t pay off the balance, the amount owed exponentially increases. For example, a small $10 purchase becomes $11.50 after one month at a 25% rate, $116 after six months, $320 after a year, or $1,290 after three years. Once you break this habit of charging small purchases you’ll be able to truly save your hard-earned dollars instead of paying high-interest fees.