Millions of Americans are trying to dig out of debt. In fact, the average credit card holder owes more than $6,000.
But experts say three key words that can help you negotiate a lower rate – or even wipe your credit clean.
News4 Consumer Reporter Susan Hogan explains below and in this episode of her show, Susan Makes Sense.
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We spoke with Bankrate’s credit card insider, Mark Hamrick, about these key words and why they work.
One easy step to start getting out of debt
Here’s one simple step to start getting ahead of debt: Call your credit card company.
You may be able to get a lower interest rate, which will help your debt from growing out of control. A lower interest rate means your debt won’t grow so fast.
Saying “please” is never a bad idea. But these are the real magic words if you’re seeking to get a lower credit card interest rate:
“Hardship”
Tell your credit card company if you lost a job or face a steep medical bill. There’s a strict definition of financial hardship. So, prepare to provide proof, such as an unemployment application, medical bill or other documents.
The company may suggest closing your credit card or account. And it’s important to note that closing an account could affect your credit score.
But you could also work out a payment plan and a reduced interest rate.
Hamrick described this as the “emergency surgery” route. But if you’re in a tough spot, reducing your interest rate will mean less debt to pay back later.
If you’re not in that situation, there’s another phrase to try.
“Promotional” or “retention” rate
Ask your credit card company for a “promotional” or “retention” rate.
The company may offer lower fees or interest rates to keep your business.
“Credit card issuers all the time lower the interest rates simply for asking,” Hamrick said. “Because something for them is better than zero.”
When you call, say: “Do you have a promotional or retention rate you can give me?”
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