Questions and Credit

I think the fear of asking things is a horrible horrible thing. The most clear cut example is in school when kids are afraid to ask questions, worried of slowing the class progress. Professors and teachers address this repeatedly, even with the horrid quote “There is no such thing as a stupid question.” I’m guilty of it to a certain degree I suppose, but I’ve gotten quite better in recent times.

But this fear of asking questions is so deeply threaded in our society that the idea of haggling is almost taboo. You don’t go into stores planning to haggle except for local shops. This is such a sad thing. Sure you can’t negotiate a Snickers bar for $0.25 but you can most definitely haggle for that $2500 stereo.

Today’s lesson though is a bit of a victory for me. It has to do with the ever-evil credit card companies. I only have one credit card, and it’s one I’ve had now for almost two years I think. It’s an American Express Student card and since I originally got it with the $600 limit on it, they’ve since let me rise up to $3000 in credit. Something I took advantage of when I was out of school, off of financial support and living outside my means.

Now I’m struggling to pay it back. Though I realize my debt is measley compared to much of the US, and indeed it’s small compared against most people my age, I’m determined to make the right financial choices.

Sure I eat out a lot and spend fairly freely, but I always have enough to make $200 on my credit card (which I no longer use.) Well last week I come across a fantastic down to earth article about personal finance. If you haven’t read this article you all should: Become Wealthy by Clayton Cramer.

And he points out the evils of credit card debt. So I sat down and figured out how much my credit card was costing me and was shocked to discover that my AmEx had ballooned to just over 30% APR. I had missed some payments when I was in tougher times but I hadn’t kept a close eye on the interest rates. So they were saying my minimum payment was $85 and I was spending $75 on it just in terms of interest. Sweet Jezus! I nearly wet my pants when I read that.

Paying $200 a month meant 17 months before it was paid off (I used some online calculator, CNN Money’s credit card calculator is excellent.) So my $2600 was going to end up costing me $3400, on top of whatever I’ve already paid to them. Ugh.

This morning I decided to ask them what I could do. I knew they would change APRs for people struggling to make payments, but would they do the same for someone able to pay up and over their minimum payment? I called them and spoke to a chirpy gal named Lisa and after phrasing my question she asked to put me on hold while looking over my account.

About two minutes later she came back and told me they had changed my APR to 16%!!! Nearly halving my interest rate. So now still at $200 a month it will only cost me ~$2900 to pay off my credit card. Still not ideal but oh so much better than it was earlier.

Five minutes of my time saved me $500 in interest. Eat that Geico.

Now to just get a job where I make more money. Anyone out there want to hire me as their blogging liasion? Hey, it never hurts to ask. 😉

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