As a legal intern here at UCAN I am exposed to a ton of articles and Blogs on consumer awareness and technology each week. Recently, I read an article written by a woman who took a proactive approach to saving money with her wireless service provider upon renewal of her service contract. And as a broke law student with both outstanding student loans and consumer credit card debt, I wondered if I could apply the lessons learned from this woman's approach with her wireless service provider to my credit card accounts in order to lower my APR's and save some money. Here's how two phone calls saved me nearly $900 this year.

But first off, let's clarify some basics here, for the sake of reference. We'll call my credit cards X, Y, and Z, where X is the higher-APR card, and Y and Z are the lower-APR cards. Also, keep in mind that because my cards Y and Z are owned by the same company, I am unable to transfer balances between the two. So, now on to the details of saving money...

First, I diligently paid down my card X, b/c it was the highest APR, and I used the promotional balance-transfer rates offered by cards Y and Z to transfer balances from card X. After cosolidating my debt onto two cards, and before having read the wireless service provider article mentioned above, I transferred the entire balance from card Y back to X, b/c of an excellent promotional APR they offered. After reading the article though, I wondered if I might be able to call card Y and get an even better rate. So here is what I did.

Upon calling the customer service agent, I informed her that I was considering cancelling my account, but was interested in speaking with a Retention Specialist to see if they might be able to entice me to keep my account open with them. Now, keep in mind that it's very possible that the facts that I have been with this company for 11 years, have been in excellent standing with them for the past 8 years (although, I did have a bumpy ride of late payments and "past due" notices for about a year before that), and that I had just transferred my entire balance out to another card, all may have played into the company's willingness to get my business back and to keep it for the long-term. But, upon my request, the customer service agent transferred me immediately to what she referred to as an Account Specialist.

I was very candid with the Account Specialist. I told her I'm a broke law student, that I am working very hard on getting better control of my debt in order to strengthen my financial stability (hahaha... as if I really have any, living on student loans, right? But, that's another story for another day.), and that I am considering closing my account with them since I just transferred my balance out to another card because of a favorable APR offer. But, I did NOT tell her what that APR was. After all, why lay all my cards on the table, right? She took a look at my account, and within about 15 seconds, she offered up a rate that was well below what my current APR with that card was, and it was even below the promotional APR rate I had been given on card X. She offered me 3.99% as a non-promotional rate; that is, the rate would last for the life of the balance. Now honestly, I wasn't expecting something that good on the first go-round, but it was very much what I was looking for, so I decided not to haggle. I accepted the rate and immediately transferred my balance back to card Y from card X.

But what was the effect of the money shuffle? My monthly interest charges went down from $52.76/month to $19.87/month. That's a savings of 62.32%

With a smile on my face, I decided to try again with card Z, even though it was owned by the same company as card Y. My expectations were lower, however, b/c I figured the Account Specialist would be able to see the offer that had just been given to me on card Y only a few minutes earlier. But I thought it was worth a shot. After all, I had nothing to lose by asking. Also, keep in mind that this time around the results were quite different than before, although still pretty good, but I think I have figured out why, and learned another lesson in the process. So read on.

The difference this time is that I did NOT transfer the balance out of card Z onto card X before calling customer service. I think that had a big effect on the offers that were given to me, and I would definitely not make the same mistake in the future. Anyway, this time I called the customer service number and told the agent that I was considering transferring my balance to another card and closing my account. I asked to speak to an Account Specialist and was immediately transferred again.

Once again, I gave the Account Specialist my story, and asked what he could offer me to entice me to keep my balance with that company and to keep my account open. This time, however, even though my account had the same level of good standing as my card Y had, the first offer was less than enticing. I politely told him that the offer wasn't nearly good enough as my APR offer with card X was MUCH better. But again, I did not tell him what the APR offer with the other company was, or even which company it was. He made another offer. It was decent, but not really what I was looking for. After declining again, he made an offer that wasn't 100% what I was looking for, but was still very good.

I really didn't want another "promotional" rate offer, but he lowered my entire balance down to 2.99% for 9 months. Considering that part of my balance was at 6.9% and part of it was at 20.31% (yes, I know, that's really high; I had been dreading that rate for a long time and had been trying to get rid of it for just as long), I jumped at the offer. But what made it even better was that after the 9 months, the rate would not go back up to the horrific 20+% rate. He lowered my standard purchase rate to just over 10%. That's right, he cut my purchase rate in half. I thought that was pretty good, but either way, I figured it wouldn't matter. In 9 months when the 2.99% APR is about to expire, I just figure I'll repeat the same process in order to improve upon my rates even more.

However, I learned something here that I can apply to next time. Just before my 2.99% APR with card Z expires, I will not be calling to ask for a decrease in my rate. I will actually transfer the entire balance out to card X, so that card Z knows I am not just bluffing. Perhaps then they will ante up like card Y did with a low permanent rate rather than just a temporary promotional rate.

And what was the final financial benefit to me? Well, with the lowering of card Z's rate, my monthly interest charges decreased from $58.81 down to $20.08. That's a savings of 65.86%. And all together, for the sake of putting a hard and fast number to my savings, on an annual basis, I calculated my total annual dollar savings (but assumed for the sake of ease in calculating this number that the monthly interest charges were steady each month, without declining due to making normal minimum monthly payments), which came out to $859.44.

So, my final thought of this overly long blog is this: if your account is in pretty good standing, take 10 minutes (that's all this entire process took me) to call your companies and ask the right questions. If you can, transfer the balance out of a card to another one before asking for an APR reduction. But even if you aren't in a position to do so, try bluffing your way into a rate reduction. It can make a HUGE difference not just in your monthly interest charges, but also to your financial stability, as it has done for me. After all, a savings in my montly budget of 3.6% is pretty significant, especially for only 10 minutes of work. Good luck.