Debt-Free Forever by Gail Vaz-Oxlade (the beginning after the end read novel .TXT) 📕

can you do to help me out?” If he can’t do anything, ask for a manager. If she can’t do anything either, keep escalating the call. You want to find the body that can do something.

If you have a good credit history, remind the person you’re talking to that other card issuers want your business. Be polite. Stress how much you like your card. But be firm. You’re not going to settle for a crappy rate. You’ll move the business. They may reduce your rate on the spot. Or they may say they need to look into it and will get back to you. If they don’t, call again.

GAIL’S TIPS

The biggest reason people end up paying too much to credit card companies is that they don’t shop around. People commit to a card because it offers points, travel miles, or some other incentive and then they stop paying attention to their costs. Credit has become like every other consumable: shop around for a better deal.

If you have a crappy credit history, remind the person you’re talking to that you are desperate, that he is only one of many creditors you’re speaking with, and that if you can’t find a way out of this mess you’ve made of your financial life, then you’re willing to bite the bullet, declare bankruptcy, and start fresh.

While that works a lot of the time, sometimes it doesn’t. Or sometimes the rates don’t come down enough. Time to try the second tactic: the balance transfer.

Strategy 2: Do a Balance Transfer

Transferring your balance from a card with a 28.8% interest rate to a 2.5% interest rate seems like a no-brainer, right? But there are a few things you should watch for since not all balance transfers are created equal.

If you’re doing a balance transfer to a card with a promotional offer, check how long the lower rate will last and what the rate will be when the special offer period is over. Offer periods vary from six months to one year, after which the card will revert to the normal (usually much higher) interest rate. If you can’t pay your balance off before the rate skyrockets, you may be stuck paying even more than before. Note on your calendar, in your daybook, or in Big Fat Red Capital Letters on your wall the date that the promotional interest rate ends and plan either to have the balance paid off in full or to transfer the balance to a cheaper option when the higher rate kicks in. The credit card company isn’t going to remind you, so if you don’t keep track you can’t go whining about what fiendish louts they are.

Make sure you understand what the low rate applies to. There are generally three types of transactions you can have on your credit card: a cash advance, a balance transfer, and purchases. Each of these transactions may have a different rate, with cash advances usually the highest and the balance transfer rate the lowest. If the offer you receive applies only to a balance transfer, do not make additional purchases on that card.

Why? Because every payment you make will go against the balance transfer amount, leaving the new purchases to build up interest at the higher interest rate. Really! That’s what happens! Believe it!

Balance transfer fees are usually buried in the mouse print, so read your credit card agreement thoroughly before you make your transfer. Many people receive offers with no balance transfer fees and that’s usually clearly stated since it is a selling feature that’s attractive to buyers.

While you’re always supposed to pay your credit card on time, missing your due date by even one day on a balance transfer will result in the lender switching you automatically from the promotional rate to the standard rate, no ifs, ands, or buts.

If you do a balance transfer, cut up the old card. Don’t cancel the account for six months so you don’t lose the credit history. But don’t fool yourself into thinking that you’ve taken care of the problem and that you now have even more “free money” to spend. This is one of the biggest traps of balance transfers. If you forgive yourself and don’t get a handle on your expenses—if you continue to think of credit as disposable income—then it’s only a matter of time until you’re pulling your hair out and running naked through the streets screaming!

Remember that credit card companies don’t make low-interest balance transfer offers out of the goodness of their hearts. They know the odds are on their side that you’ll fail to pay off your balance on time, triggering the higher rate, or that you’ll neglect to switch your balance to another credit card when the promotional period is up.

Make sure you like the features of the card to which you’re transferring. A card with an annual fee is a card that costs more. Call it a fee, call it interest, whatever you call it, it’s costing you money, and since the point of the transfer is to get those costs down, taking on an annual fee makes no sense.

And please, please, don’t forget about your old card. Until you receive some sort of confirmation that the balance has officially been transferred, you still need to meet the next due date of your old card or you risk getting slapped with a late fee and a black mark on your credit history.

If you have room on your line of credit, transferring the balance from more expensive debt to your line will make sense. Don’t fall into the trap of thinking you “paid off” your credit card debt. You didn’t! You simply moved the debt around. Take those credit cards and cut all but one up. And make sure you’re actively paying down that line, since the biggest temptation with a line of credit is to make only the interest payments required to keep the line in good standing.

Strategy 3: Get a consolidation Loan

If you’re