Paying Down Debt Positions a Better Rate Negotiation
Last time we mentioned that your credit card rate negotiation will benefit from paying down your debt and boosting your income. Now its time to cover the obvious step that every body hates.
Stop Spending So Much
It’s the discretionary income that really makes the difference. If you earn a $100k a year and spend $120k you are worse off than someone that earns $30k and saves $10k, but you have more potential to turn things around. From a financial perspective its easier to cut costs and expenses than it is to boost your revenue. Psychologically, it’s a different story, but force yourself it will help.
Before you make the call work hard to decrease your expenses. There are a number of things you can do to decrease your expenses and divert some of those funds towards your credit cards. These are just a few:
- Stop dining out all together
- Buy cheaper food at the grocery store
- Take your lunch to work
- Don’t go shopping for anything but necessities
- Stop renting movies
- Drive less to save money on fuel and wear and tear on your car
- Drop your cell phone plan down
- Drop your cable package down or cancel it even if its just for the summer.
Why?
All this work to decrease your expenses can make it possible for you to get your balance down further and faster. That might bring your outstanding balance down to a percentage level that allows the credit card company more room to offer you a better deal. Paying down your credit card is the overall goal anyway, and so it helps no matter what the result of your rate negotiation.
What’s coming In our next installment?
We will cover some of the research needed and start to talk about ‘The Script.’
For More Information see:
Part 1: Prepare Before You Call Your Credit Card Company for a Better Interest Rate
Part 2: Credit Curb Appeal for Credit Card Rate Negotiations
