In some cases the credit card companies will not give you a good rate reduction or a rate reduction at all.  If that happens, you’ll need to find out several things: Ask the person on the phone why they won’t give you a rate reduction, find out what your credit score is, and find out if there are other companies willing to take your credit card balance for a transfer.  Also, its good to not take no as an answer from a person who can’t say, “Yes.”

• Find out when you’ll be eligible for a rate reduction because in some cases it is a matter of time
• Find out if you have a short term chance to get things resolved (if you missed a payment, you will have a window of penalty) - prepare to call back then.  Set a reminder on your computer or in your day planner or on some place that will remind you
• Again, find out if a balance transfer will work for you.  Be willing to threaten a transfer while on the phone, some companies will work with you

I plan on getting other bloggers involved over the next six months and we’ll try again then.  Between now and then one of our cards will become eligible for a rate reduction.  In fact its in March.  In fact its on our calendars.

The PaidTwice.com blog asks an important question: what else could one save money on for seeking businesses to change their billing, interest making and the like.  She’s after Saturn to help pay for expensive vehicle repairs.  Go read the article and offer up a word of encouragement.

We’re on the second to last day of the Credit Rate Reduction Rally - tomorrow I’ll cover what to do if your reduction attempt failed - but today we’ll look at reasons not to participate if you’re sitting on the fence.

You’re already getting zero percent interest -  If you’re already getting a special interest rate then this isn’t for you.  Clearly you’ll need to jump onto the bandwagon when those rates jump up at the end of your ‘interest free’ period.  Kudos for your great rate and keep it up.

You like giving your money to others - If you love paying money to others for ’services’ rendered in the past this is great - but I’d suggest giving your money away to charities that could use it for better things than lining credit card company wallets.

You pay off your credit card every month - This one is a double edged sword.  If you do pay it off every month and have the discipline to do so, great, but its still good to make sure that you’re getting the very best rate possible.  That way if you accidentally let a balance roll over you’re not going to get hit with as high a finance charge.

The last, faux reason would be that you hate being on the phone with the people in charge of taking these sorts of phone calls.  Get past your concern and save yourself a buck or seventy and get this taken care of.  If you could invest that money laster instead of paying it now, you’d be much better off!

Since this week is the Credit Rate Reduction Rally I wanted to explore, each day, one of the areas that the rally touches on.  You can imagine that credit card companies are in the business of making money off of your spending money.  Each time you spend money on your credit card and carry a balance for the specified period of time, your card company will charge you interest.  There are three way that the credit card companies may calculate interest: Average Daily Balance, Adjusted Balance, and Two Cycle Balance [see: How Does Your Credit Card Calculate Interest].  Since Average Daily Balance is common, we’ll assume that your credit cards use this method, but check your agreement, it could be different.

Given that there are multiple variables, we’re going to save time to present a principle: Lowered interest rates can save you huge amounts of money, even if you pay off a loan in the same standard amount of time.  Below is a chart that outlines this principle.

The other side of lower interest rates is that you can pay off the loans faster at a higher payment per month.  For example, the chart below shows that the payment is nearly identical for all three loans, but that the time period for paying off the loan is significantly faster with the lower interest rate.

The other side of paying off the loan faster is that you’ve also paid less interest, which means more of your money later on to do what you want with, for example investing, which works in the inverse: the higher interest you earn, the greater the return on the investment.  Think of interest rates as reverse investing: the more you pay, the more others are making off of you.  Their investment was the initial cash and patience with time, their return could be thousands of dollars.