Have you ever seen the commercial that says "When banks compete, you win?" I'm not sure what company that commercial was for but it is so true! A Defying Debt reader recently shared her sneaky strategy of getting her interest rate lowered and I think it was such a wonderful idea that I wanted to pass it along to everyone.
Raven had over $65,000 worth of debt at the end of 2005 and now owes $49,000. That is an amazing feat in itself. If you do the math that is $16,000 paid off in just a few months, wow! The problem was was that she had one credit card with a balance of $14,700 with a whoppin 22% interest rate. She had tried numerous times to call the credit card company to have them lower her rate but with no success. I guess they knew they had her in a bind and they were not going to make things any easier for her (those bastards).
So she took matters into her own hands, contacted a bank that would let her take out a personal line of credit for $15,000 at 20% interest to pay off her credit card. Now that is all fine and dandy, 2% interest on $15,000 can add up. But she didn't stop there.
She then called the credit card company back and asked them what it was worth to them to keep her as a customer. They then offered her a balance transfer rate of 6.99% for the life of the loan!
Just by creating a bidding war between banks she was able to cut her interest rate down by 15%. That just proves the commercial right, when banks compete, you win!
I'm lovin it! Congrats to you Raven! Thanks for sharing.
Monday, March 13, 2006
Reader Success Story
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7 comments:
I think that commercial is from Lending Tree "When banks compete, you win!"
Investorial that's right. It's their trademark!
I really enjoyed the story thanks for sharing. I always find it amazing when banks all of a sudden increase your creditline or give you these great offers with out you asking bc they know your doing well but its funny that when you call them out of the blue and nothing is happening and you ask for a lower interest rate they decline. I guess your credit has to be in an excellent condition and your debt ratio at a certain percent for them to consider you...and also a little bank competition like in this case always helps. : )
I love that she did her own competition!
Off topic:
Congratulations on being featured in Money magazine! I've been reading your blog for a couple of months now and I think you are outlining a plan for all those looking to get out of debt. Anyhow, as I was flipping through the magazine that I received today, I came across a site mentioned in the article "The Best Of Blogs From the Financial Front". It looked so familiar and after reading the profile it gave, I knew it was yours!
For those looking for the article, it is on page 44B of the April 2006 issue. I also highly recommend Money. It is great reading with a variety of different financial stories.
Keep up the great work and I hope to read very soon of when you reach $0!!!
Congrats on thr Money Magazine kudos! And yes, it does work when you get tough with the credit card companies. They want you to carry debt with them because that's how they make money!
thats awesome! i tried to check it out but they still only had the march issues for sale.
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