Survive This Economy: Tackling Credit Card Debt
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CHICAGO (CBS) — Every week on CBS 2, we’re trying to help you, “Survive This Economy.”
Today, we tackle a problem millions of us have – credit card debt.
CBS 2’s Dorothy Tucker reports on an easy way to see real savings; and it can all begin with one phone call.
The Wrights are just like many other families – ready to save some cash. The couple has four kids and even more credit cards.
Sinora Wright has been calling her credit card companies to try to lower the interest rate on her cards.
She politely explained to Chase Bank that she hasn’t missed a payment on that card in several years and wants the bank to reduce her interest rate.
Sinora was following the advice of financial consultant Delilah Diaz, who is helping the family tackle a $25,000 credit card debt.
Diaz advised the family to use any extra money to pay off department store credit cards first. Those cards can have interest rates as high as 25 percent. Diaz advised them to close the accounts and cut up the cards.
“The less credit cards in your hand, the less access you have, the less expenses you have,” Diaz said.
Next on the list is to pay off credit with the highest interest rate and lowest balances.
The best way to save some quick cash is to follow the advice Diaz gave Sinora: simply ask the banks to lower your interest rate.
Diaz said you should tell your credit card company: “I’ve been paying you guys lots of interest for the last couple of years, so can you guys review my account and see what you could do for me?”
If they say no, like they did in Sinora’s case, you should ask what else they can do.
With a little pressing from Sinora, a Chase Bank representative offered her a credit equal to the amount of her last payment: $137.
“I really was not expecting that, so it was a good surprise,” Sinora said.
Sinora tried to get a lower rate or rebate on all 12 of her credit cards, but only one – Chase – budged.
That doesn’t mean you should stop trying with your own credit cards. It also doesn’t hurt to call the banks every few weeks. What do you have to lose?
So far, the Wrights have saved $137.93 in their efforts to cut down on credit card debt and other expenses as part of CBS 2’s “Survive This Economy” series.