How to Save Serious Money on Credit Card Bills

Most people don’t realize that it is possible to save money on their credit cards by lowering the interest rates they’re paying every month. No, this isn’t some “debt consolidation” scheme to transfer these unsecured loans to a secured one with a lower rate. That’s what racket the banks are working now, saying you can take some of these payments off yearly income taxes by transferring all credit card money owed into a refinance on your home. The fact is that once this is done, your home stands as collateral and the bank actually can put a lien on it if a catastrophe happens and the monthly payments aren’t met. Nor is it another and even worse plan that some “debt elimination” companies are broadcasting. They say that they will reduce the monthly payments you owe if you let them negotiate directly with your creditors. What they do not advertise is that this will seriously hurt your credit for a long time and it will be quite hard to get it back up to a good rating. That means that most large purchases in the future will be seriously affected–things like a home or a car or large appliances will actually cost you more in the long run.

What I am talking about will take some effort on your part, but it will be well worth it. First, everyone needs a little education on credit card companies. They are in business to make as much money as possible, period. If your credit is good and you are carrying a rate of over 15%, you’re being swindled, pure and simple. Companies do not lower your rate automatically if your score goes up. It’s up to you do demand that they do it. Even if your rate isn’t so red hot, credit card companies need their cardholders to make money. It costs them lots of bucks to get every new customer and it’s a lot cheaper for them to keep the ones they have. If a person has been paying regularly with no problems there’s all the more reason for them to adjust their rates lower. Here’s the procedure to follow.

First gather up all credit card receipts and see the total owed. Then see the APRs on each and start with the highest, not necessarily the largest owed. Get the toll-free number of the company on the receipt and call them. Politely say that you’re a good customer who’s gotten some advertisements from other companies to switch to them and that you’d like to stay with Company A, but that you’ll have to switch if they don’t lower your rate considerably. In a recent survey taken from a public interest research group in 2002, more than half the people who did this got lower rates. And the group chosen had differant scores too. One cardholder was paying an outrageous 31% for an interest penalty rate she didn’t even realize she was paying and her rate was consequently cut in half. Sometimes the person on the phone isn’t cooperative, but that’s o.k. Just pick up the phone and call again a day later. Not all customer service reps are the same. There’s always the option of asking for a supervisor. But in the unlikely event that they won’t budge, there is another option. Simply go to Bankrate’s search engine to look at some companies online and see if there’s one that is offering a pretty good deal on bad credit payday loans. Once that’s done, make a checklist of items to keep if you want to transfer from an old account to a newer, lower rate card.

Send minimum payment to old company before the due date.
Sign up for the new card.
Complete the balance transfer form for the new account.
While the balance is pending continue makeing payments to the old card.
Receive the notice of the balance transfer to the new company and call the old company to verify that transfer.
Receive the zero balance statement from the old company. Closeout the account with a phone call and be sure to tell the rep to tell any credit bureau that the account was closed at the customer’s request. That way your credit won’t be affected.

Credit Restoration Tips

Obviously, the best way toward credit restoration is responsible spending and prompt payment of bills. However, what if your bad credit stems from inaccurate information on your credit report? What can you do? Legally you can request for a probe of data in your file which you contest as erroneous or not complete. No fee is necessary for this. Some folks engage a company to look into the data on behalf of them, but this attempt at credit restoration is not really necessary. Any credit restoration methods that can be done lawfully by a credit repair company can also be done by yourself at small or no expense. Many companies claim to be able to remove bad items from your credit report. However, this sort of credit restoration is really just a pipe dream. One cannot lawfully remove correct and damaging data from a credit report for credit restoration purposes.

For credit restoration, inform the consumer reporting firm in writing, what data you think is erroneous. Send photocopies, not originals, of all documents to back up your contention. Besides supplying your full name and mailing address, your communication should list out the erroneous items you contest in your report; mention clearly the facts and the basis on which you contest the information, and demand that the erroneous data be withdrawn or rectified. It is a good idea to attach a photocopy of your report with circles around the items of dispute. This type of credit restoration method can be highly effective. Just make sure to dispatch your communication by certified mail or “return receipt requested” to obtain evidence that your communication has reached the consumer reporting company. Ensure that you retain copies of your contest letter and attachments.

The consumer reporting companies are obliged to scrutinize the disputed items within a period of 30 days – not if they think that your contest is frivolous. They are required to send all the related data you furnish about the error to the agency that supplied the information. On receipt of the contest notice from the consumer reporting firm, the data supplier is obliged to examine and reappraise the relevant data, and report the outcomes to the consumer reporting company back. If this examination proves that the contested information is indeed erroneous, the data supplier must inform the consumer reporting companies across the country so they can rectify the errors in your file.

On completion of the examination, the consumer reporting company is required to inform you in writing the outcomes along with a copy of your report free of cost if the contest culminates in a modification. If a data item is altered or removed, the consumer reporting company can not include the contested data in your file again provided the data supplier does not confirms that the item is correct and in full. The consumer reporting company is also required to provide you in writing full details (name, address, and telephone number) of the data supplier. You have the right to ask and the consumer reporting firm has the obligation to send details of any rectification to all those who got your report during the last six months. Additionally, you can demand that a rectified copy of your report be mailed to anyone who got a copy within the last two years for employment reasons.

In your credit restoration efforts, if a probe doesn’t settle your contest with the consumer reporting company, you are entitled to demand that details of the contest should be incorporated in your file and also in reports to be issued in future. You also have right to demand the consumer reporting company to give your statement to all those who got a copy of your report recently. However, be prepared to pay a fee for this requested service.