YNAB You Need A Budget

[mahnshooth]

So, I have read through most of the book already but have not had the time to follow through on any of the steps until this morning. I called up each of my credit cards, 5 different ones , and ran through the script in Chapter 1. Allthough 3 were stubborn, I was able to get one to drop my APR by 2% and another one by 5%.

I followed the advice of documenting who I talked to so I will be able to reference them in the future. One of the stubborn ones was just taken over by Chase last month and they said they would need 6 months to review my account performance before they could adjust my APR. Probably a bunch of crap, but we will see.

But, lower APR's on 2 cards for 20 minutes worth of work...not too bad.

[BC Aussie]

Hi there

sorry, but what book/script are you referring to??

Thanks in advance

Bruce

PS I think that those of us In Australia (and those who lend the money) have a "here it is, like it or lump it" type of arrangement.

Haggling with banks/CC companies isn't something I've heard much about here.

That said, "card whoring" - don't mean to offend anyone (ie searching for the lowest rate for the life of debt) is almost a sport!

Cheers
Bruce

[mahnshooth]

Hi there

sorry, but what book/script are you referring to??

Thanks in advance

Bruce

It was from Chapter 1 of "I Will Teach You to be Rich."

The script was basically a back and forth on getting the interest rate lowered and not giving up when they reply back with a quick no.
Nothing too complex, but it helped me with what to say because I am horrible at haggling.

[wabango]

i had an interesting experience a few weeks ago. I have debt on 3 cards, one from Amex at 2.99% fixed until balance is payed off, one from Chase at 15% because I let the introductory balance transfer period expire (stupid), and one form Wells Fargo at 12%. the 12% carries my largest debt, but I have been making minimums and focusing on the 15% for the last 3 months, since I finally got a job where I could focus on repayment. On a wonderful weekday off, I called my credit card companies, hoping to lower my rates; couldn't hurt right? Wrong. Neither the 15% nor the 12% lowered, even though I had lowered the 12% to 9.99% for 6 months about 2 years ago thanks to a helpful banker. 2 weeks later, I received a letter from Wells Fargo saying that my rate was going to be raised to 17%, and that if I wanted to keep the 12%, I could put some sort of hold on the card so that it was no longer a "credit card." It would become a loan at 12% that I would have to pay off. If I still wanted the use of the card, I could just do nothing and the new 17% rate would begin in a few weeks. Needless to say I was outraged and called, only to hear that the rate increase is an automated process that is decided by computer weighing many factors. Actually everyone I talked to used almost the same line. Any suggestions.

[gregdo]

If you have your own home and have some equity in it, then another option is to apply for a home equity line of credit. These are usually at the bank's prime rate (e.g. mine is 2.25%). Use the line of credit to pay off the credit cards. Cut up the cards and cancel the accounts. Pay off the line of credit with the now much lower interest rate.

[sweetums]

If your interest rate was raised, that normally means that they saw something on your credit report that gave them cause for concern. I would order a copy and take a look.

[MacGuy]

2 weeks later, I received a letter from Wells Fargo saying that my rate was going to be raised to 17%, and that if I wanted to keep the 12%, I could put some sort of hold on the card so that it was no longer a "credit card." It would become a loan at 12% that I would have to pay off. If I still wanted the use of the card, I could just do nothing and the new 17% rate would begin in a few weeks. Needless to say I was outraged and called, only to hear that the rate increase is an automated process that is decided by computer weighing many factors. Actually everyone I talked to used almost the same line. Any suggestions.

If you are in the U.S., the new credit card laws are to your advantage in this situation. The new rate can only apply to new purchases, not to your current outstanding balance. Per the Federal Reserve Board's consumer website:

"Increased rates apply only to new charges. If your credit card company does raise your interest rate after the first year, the new rate will apply only to new charges you make. If you have a balance, your old interest rate will apply to that balance."

See http://www.federalreserve.gov/consumeri ... drules.htm

[YYC27]

If you are in the U.S., the new credit card laws are to your advantage in this situation. The new rate can only apply to new purchases, not to your current outstanding balance. Per the Federal Reserve Board's consumer website:

"Increased rates apply only to new charges. If your credit card company does raise your interest rate after the first year, the new rate will apply only to new charges you make. If you have a balance, your old interest rate will apply to that balance."

See http://www.federalreserve.gov/consumeri ... drules.htm

I don't believe those rules were in effect during October 2009 when that post was made.

[mozzie61]

Thanks for the link MacGuy, interesting reading. I think your Feds need to come down under and show our government how to pull the greedy Oz credit card companies into line. CC providers here mostly link movements in their interest rate to the Reserve Bank, however the rates are already at an excessive premium to the standard cash rate (currently 4.75% , with CC rates ranging from 11% to as high as 21%), so it's a bit rich when they use the latest 0.25% increase to jump them up even more. Conversely they're quite slow in bringing the rates down (if at all) when they go the other way. Of course any increase applies to all of the outstanding balance and not just new purchases.

A couple of the other interesting things from the FRB page:

Your due date should be the same date each month (for example, your payment is always due on the 15th or always due on the last day of the month).
An especially sneaky trick common here in Oz is this moving around of the due date, by up to 4 days in some cases. When we were living closer to the edge this one caught me out a couple of times, and of course was accompanied by a sizable fee for being a day late, even though the payment was made on the same date as the previous month.

Payments directed to highest interest balances first.
Exactly the opposite down here. If you take up a low interest balance transfer offer on a card with existing debt all payments will go to the low interest amount first, effectively freezing your high interest balance for the grace period on the transferred amount. That's why I look closely at any balance transfer offers to see what the overall rate is compared to where the balance is currently sitting. I guess on the positive side it means there are a lot of balance transfer offers as the CC hawkers try to catch unsuspecting transferors. You just have to be careful that the balance transfer will work for you and not them.

Now that I'm sitting on the outside surveying the damage from the credit card cycle of abuse we had descended into my eyes have been opened to the incredibly high price we paid, and are still paying, for our foolishness. Im looking forward to ridding ourselves of these mercenaries forever!

[MacGuy]

I don't believe those rules were in effect during October 2009 when that post was made.

My bad. I didn't notice that the post was from Oct '09 and the next reply was from Nov '10. That's why the CC companies were raising rates at that point - before the new law went into effect and they couldn't do it anymore.

[MacGuy]

Payments directed to highest interest balances first.
Exactly the opposite down here. If you take up a low interest balance transfer offer on a card with existing debt all payments will go to the low interest amount first, effectively freezing your high interest balance for the grace period on the transferred amount. That's why I look closely at any balance transfer offers to see what the overall rate is compared to where the balance is currently sitting. I guess on the positive side it means there are a lot of balance transfer offers as the CC hawkers try to catch unsuspecting transferors. You just have to be careful that the balance transfer will work for you and not them.

That was killing me on a couple of my cards as well. I think now that rule is that any payments over the minimum are to be applied to the hightest interest rate first. They can still apply your minimum payment to the lowest rate. That still sucks, but at least it's better, and makes it possible to pay off those higher interest rates with increased payments.

[TheGooch]

Wow, OZ cc's are brutal. I hope that they eventually get hit by reform measures, and lawsuits. :]

[mozzie61]

Wow, OZ cc's are brutal. I hope that they eventually get hit by reform measures, and lawsuits. :]

Maybe I should start a class action , but my plan is to pay off the mercenaries quicker than the time it would take for any lawsuit settlement. In any case I can only blame myself for getting so foolishly indebted on credit cards, so I don't see any grounds for suing. I don't expect any credit card provider will go out of business just because Mozzie is no longer playing the game, but NEVER EVER paying interest to them once this lot are paid off will be my personal silent protest.