I’m a huge fan of credit cards. Yep, I said it.
Contrary to what most personal finance experts will tell you, I think having a credit card, or a few credit cards, can be a smart money move in your 20’s and 30’s.
Credit cards offer so many perks. You can get free plane tickets, cash back, discounts, free hotel stays, buy all the stuff you want on Amazon, etc. Depending on which credit card you have, of course, will determine what “goodies” you get. The goodies though are the reason to have a credit card.
When you pay for stuff with your debit card you get nothing. When you pay for stuff with your credit card you get freebies.
I’m not going to lie, not having good self-discipline around your credit cards can cost you a ton. If you’re struggling with credit card debt, I encourage you to come up with a payoff strategy and get debt free ASAP.
If you can manage to use your credit card like a debit card you will win in the credit card game. What I mean is that you pay off each month what you charge in full, or nearly the full amount. Sometimes leaving just a tiny bit on your credit card can actually help boost your credit score.
So, What Are The Secrets?
Did you know that you can negotiate:
To have your late payment fee waived
To negotiate for a lower interest rate on your credit card
Oh yeah, this is the good stuff.
Don’t feel bad if you didn’t know. Very few people know that you can actually do this.
“People have way more negotiating power with their credit card issuer than they think they do,” said Matt Schultz, CreditCards.com‘s senior industry analyst. “The worst that can happen is they say no, but most of the time, they say yes. The credit card market is incredibly competitive right now and consumers should use that to their advantage.”
Interestingly, millennials have an 84% success rate when requesting a late fee waiver but only have a 36% success rate when asking for a lower interest rate, according to CreditCards.com’s recent poll.
Do I Care?
Heck, yes you care.
Why, because using these two secrets can save you a ton of money in the long run that you can use for all sorts of financial goals you are trying to achieve, or just fun stuff you want to do.
Asking for your late payment to be waived is pretty easy. Most companies will take care of your first late payment fee, but you have to ask. If you don’t ask, you won’t automatically get the payment reversed.
How about that interest rate reduction?
Here’s an example, let’s say I have two credit cards. One with a $3,000 balance and one with a $5,000 balance.
Let’s look at the $5,000 balance for right now.
Let’s say I wanted to pay this credit card off in 24 months (2 years). If I had a credit card with a 20% interest rate, I would’ve paid over $1107.50 in interest alone in those 2 years while I was paying it off. This is of course if I wasn’t charging even more on the credit card. (Don’t do that if you’re trying to pay the sucker off)!!
This is of course if I wasn’t charging even more on the credit card. (Don’t do that if you’re trying to pay the sucker off)!!
CreditCards.com has all of these cool calculators you can use for free, so use them!
If you called and negotiated an interest rate deduction to 15%, in the same 2 years you would’ve paid $818.40 in interest, thus saving you $289.10 total.
I don’t know about you, but I’d always take an extra $289.10!
If you had multiple cards, you could save a boat load of money each year just by using this one simple trick.
Want to know what EXACTLY to say when you call?
Look, at the end of the day, negotiating anything is one of the best money secrets I can ever teach you. You can literally negotiate *almost* everything in life. However, if I had to teach you probably the two most important places to negotiate it would be with your credit cards and your salary.
You can literally negotiate *almost* everything in life. However, if I had to teach you probably the two most important places to negotiate it would be with your credit cards and your salary.
It’s really easy, and quite fun, once you get the hang of it. Don’t worry about looking weird, or asking the wrong way. Even if you flub up your words but still get the question out, chances are you are going to save yourself some money.
I want to hear from you. Let me know how low you were able to negotiate your interest rate below.