Here’s a simple tip that I learned from Alan Corey in his book A Million Bucks by 30: How to Overcome a Crap Job, Stingy Parents, and a Useless Degree to Become a Millionaire Before (or After) Turning Thirty (which is an amazing read - I reviewed the book in an earlier post here).

You can call your credit card company every six months and ask to have your interest rate lowered. Tell them that you’ve found another card with a lower rate and that you’re thinking about transferring your balance over in order to better manage your debt. But emphasize that you’d like to stay with your current lender if they can give you a better deal, or at least substantially lower your rate.

If You’ve Missed Payments, They’ll Raise your Rate Behind Your Back

This is another dimension to credit cards that I only recently learned about. I was off in Europe for a couple of months and missed a payment, then had to rely on my other credit card and maxed that out and missed a payment (you don’t want to have to rely on cards that much on vacation, trust me - Europe requires ALOT of money - always more than you think - and then double that if you’re going to Switzerland. And it is NO FUN to be on vacation and not have enough of it.). After I got back, I had to spend 60% of my income just to get the cards back down to a reasonable level. What I didn’t know, until 6 months later when I tried this trick, is that VISA had jacked up my interest rate from 18.99% to 23.5% as a result of the missed payment. I had actually been paying 23% interest for 6 months without knowing it. Stupid.

An Annual Fee Can Save You $$ if it Comes With A Lower Interest Rate

I have always avoided cards with annual fees - what sounds worse than that? But in this case, the customer service representative offered me a card with a $25.00 annual fee and it came with a variable interest rate. The rate averages around 12% right now for me. Even combined with the one-time $25 fee, I am saving much more - about 50% than I was paying in interest previously. I might not stay with this particular credit package, but it was the best I could come up with on the phone at the time. I might try calling back again in six months to see what they can offer me then. I should note, too, that I wasn’t interested in switching my balance to one of those 0% for 6 months cards. I wouldn’t have been able to pay it all off by then anyway, and in any case, once the regular rate kicks in, it’s still a whopping 18.99%.

What I learned from Corey is that you can do this every six months. It worked for him, and me - it can work for you too. Do you have any similar credit card tricks to share? (I guess it’s not really a trick: it’s a simple matter of capitalist competition in the lender’s market).