Harry Gross: How to lower interest rate
Dear Harry: I need your advice on how to approach my credit-card issuers about lowering my interest rates. I have five cards with balances totaling $30,000. I have never been late, and I almost always pay more than the minimum required. I own my home free of a mortgage, and it's worth about $180,000. My credit score is 725, yet during the last two years, my issuers have hiked up the interest rates on several of my accounts. This is starting to concern me. I make approximately $72,000 a year in a very secure job. (The company hasn't laid off workers in the last 10 years.) If I have to, I can curb my spending and begin to put a dent in this. How about a tactful pitch that I can use to get these toads to get those rates down?
What Harry says: You should get all your ducks in a row before you contact the honchos who boosted your rate. Review your credit score and especially your credit history. Someone at the issuer probably looked only at your existing debt. Suggest that you can always move to another bank if they insist on sticking with their current rate. With your history, this should not be too tough. At the same time, start whittling down your balances starting with the one with the highest rate. There are some who would advise that if you have an account with a balance less than a quarter of the one with the highest rate, go for that first. Once that's down to zero, you'll have extra money to go after the one with the highest rate. I favor the first proposal. I know it will take a while, but the safest way to handle credit cards is to pay the balances in full each month once you get them all paid up. If you feel you cannot do that, don't buy! This way won't lead you into trouble with large balances due and hefty interest.
Write Harry Gross c/o the Daily News, 400 N. Broad St., Philadelphia, PA 19130. Harry urges all his readers to give blood - contact the American Red Cross at 800-GIVE LIFE.
