HomePersonal Finance5 Steps (+ How To Pay Them Off)

5 Steps (+ How To Pay Them Off)

Negotiate Down Your Debt APR

I’m a huge fan of taking fifty-fifty odds if the upside is big and it takes only five minutes of my time. Accordingly, try negotiating down your APR. It works surprisingly often, and if it doesn’t, so what? Just call your card companies and follow this script:

YOU: Hi. I’m going to be paying off my credit card debt more aggressively beginning next week, and I’d like a lower APR.


YOU: I’ve decided to be more aggressive about paying off my debt, and that’s why I’d like a lower APR. Other cards are offering me rates at half of what you’re offering. Can you lower my rate by 50 percent, or only 40 percent?

CREDIT CARD REP: Hmm . . . After reviewing your account, I’m afraid we can’t offer you a lower APR. We can offer you a credit limit increase, however.

YOU: No, that won’t work for me. Like I mentioned, other credit cards are offering me zero percent introductory rates for twelve months, as well as APRs of half what you’re offering.

I’ve been a customer for X years, and I’d prefer not to switch my balance over to a low-interest card. Can you match the other credit card rates, or can you go lower?

CREDIT CARD REP: I see . . . Hmm, let me pull something up here. Fortunately, the system is suddenly letting me offer you a reduced APR. That is effective immediately.

It doesn’t work every time, but when it does, you can save a significant amount of money with a five-minute conversation. Make the call, and if you’re successful, don’t forget to recalculate the figures in your debt spreadsheet.

I literally called my credit card company in the bookstore at the airport BEFORE buying the book, read the script, and was able to negotiate a better APR. And they even credited the interest for the last few years back to my account (only a few hundred bucks, but STILL). I bought the book seconds after hanging up.


That first week I practiced my script, then called up my credit cards and had my rate dropped from 18 percent to 11 percent.


Debt was awful. It felt like a cloud over me at all times. I started contributing $100 more than the minimums and crushed that shit. I still have my “paid in full” notices saved.


Decide How To Pay Off Your Debt

One common barrier to paying off debt is wondering where the money should come from. Balance transfers? Should you use your 401(k) money or your savings account? How much should you be paying off every month? These questions can be daunting, but don’t let them stop you.

Balance Transfers

Many people begin by considering a balance transfer to a card with a lower APR. I’m not a fan of these. Yes, it can help for a few months and save you some money, particularly on large balances.

But this is just a Band-Aid for a larger problem (usually your spending behavior, when it comes to credit card debt), so changing the interest rate isn’t going to address that.

Plus, balance transfers are a confusing process fraught with tricks by credit card companies to trap you into paying more, and the people I’ve known who do this end up spending more time researching the best balance transfers than actually paying their debt off.

As we just discussed, a better option is to call and negotiate the APR down on your current accounts.



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