YOUR PERSONAL CREDIT CARD MAKEOVER ACTION PLAN - Part 2

←   continued from Part 1

☐   Step 2. Get your free yearly credit report at www.annualcreditreport.com and try to reduce any high interest rates.

☐   Know what's in your credit report so you can be prepared when calling the credit card companies. You have the right to one free credit report per calendar year from each of the 3 major credit agencies Experian, EquiFax, and TransUnion. You also have the right to a free report if a bank or lender takes adverse action against you or denies credit, etc.

☐   You must pay for your FICO score from each of the agencies, usually about $10 to $20, if you want it. Yes, you have 3 separate FICO scores, but Experian no longer sells their FICO score to consumers, so only 2 are available to you (unfortunately). Your score is not essential to negotiate your credit card rates.

☐   Gather together any credit card offers you've received in the mail and note the interest rates, any annual fees, and other credit terms. Decide what rate you want to get from your existing credit card company based on your other existing cards and any mail offers.

☐ Call your company with your latest statement and credit report in hand. Be polite and tell them you're looking for their help. I've found that calling during daytime hours might get you a U.S. based representative. Explain how you've been a long time customer, how you pay on time (if that's the case, you did check your credit report, right?), and you'd like to remain a customer if they can lower your rate. You can reference rates on other cards and offers that you have received, if that applies. You get the idea.

If they say they can't do anything, be polite and ask for a supervisor or someone who has the authority to help you, work your way up the chain as needed. Be polite but firm. If they still say no, ask if there is any other way they can help reduce your rate or fees. You can always call back another day if you don't get the answer you want. Don't close your account in haste if they don't help you. Just thank them and hang up politely.

☐   If you have received new card offers with low rates in the mail, you probably have a good credit score. You can consider opening new accounts and transferring the balances if you cannot reduce the rate on your current high interest card(s). Remember you will be paying 3 to 5% to transfer the balances (or about 2 to 3 months of interest at 18%) so it only makes sense if the lower rate is locked in long enough to allow you to pay down the balance and save more than the transfer fee. Do NOT get more cards to accumulate more debt or delay paying it off!

continued in Part 3 →