Personal Finance | One Major Flaw In Lowering My Credit Card Rate

Years ago I wasn’t as aware about credit cards as I am now. I had thousands in debt over a bunch of cards. Slowly I was able to get into the habit of paying each card’s minimum on time and maybe add a little extra to one of the payments. I kept hearing about how you can call up your credit card company and get them to lower your rate. This was something I needed to do. If I was ever going to pay my debt off I would need as much help as possible.

So I took the plunge and with butterflies in my stomach I called the number on the back of my card. Very politely I asked if the interest rate I was being charged could be lowered. Fortunately for me I had been paying on time for a while and the company agreed to lower my rate from around 18% to about 14%. This was huge! I was going to save a lot and this would bring me closer to getting out of debt. That was easy!

I kept paying minimums and adding more to payments when I could. I felt like I really accomplished something and was on my way to digging myself out of debt. Then one day I looked real careful at my bill. It said something about having an 18% rate on my old balance and 14% on new charges. Huh? The 14% was only on newer charges? Not only that but any new charges wouldn’t get paid off until all the old debt was paid off first! I thought the 14% was on everything!!

My heart sank when I figured this out. How would I ever get out of debt? But it also opened my eyes. Really opened my eyes! This debt was mine to bear and I would have to get smart in order to get rid of it. I would have to always read the small print and make sure I understood what was going on. No one was going to tell me. No more charges on the card! I received an offer for a balance transfer at a lower rate a little while later and transferred the entire balance to the new card. No charges on the new card either!

You will be happy to know that this story has a happy ending. After a couple of more balance transfers, and better management of my money, I was able to pay off more and more of my credit card debt and I was able to finally dig myself out of a big debt hole. Now I pay off my credit cards in whole every month and carry no balance.

Let me know about your credit card struggles!

3 Responses to “One Major Flaw In Lowering My Credit Card Rate”

1. TheLocoMono (7 comments) on February 1st, 2008 5:23 am

   Wow, I didn’t know that could happen. It has been a couple years since I had a credit card but in a way I am not surprised, companies are in the business to make money so any “loopholes” that are legimate, they will use it to make a profit when they can.

   Thank you for sharing this with us. Definately add this to the next Common Sense Wealth carnival (I will be setting it up soon) because this is worthy of an editor’s pick.

   I stumbled it too…

2. Free From Broke (113 comments) on February 4th, 2008 3:57 pm

   Honestly it’s as much my fault as it it the credit card companies (if they are at fault at all). It’s so important to understand how these companies operate.

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