Save Money by Paying Less for Credit

Transfer your balance or negotiate your credit card interest rate.

By<a href="" target="external">ELISABETH LEAMY</a>
December 06, 2011, 9:02 AM

Dec. 6, 2011&#151; -- After successfully shaming banks into giving up debit card fees, now grass roots groups are urging consumers to switch out of high-interest credit cards. They're calling December 11th "Balance Transfer Day."

I love it! In my book, SAVE BIG, I noted that there are two ways to save on credit: to use less of it or to get it for less. Switching to a card with a lower interest rate is an example of getting credit for less.

But before the mob zeal overtakes me, one word of warning from Bill Hardekopf, CEO of He notes, "Getting a lower credit card rate may not be as easy as transferring your account to another bank. The rates you receive are based on your credit score. If your score is low, then your interest rates are going to be higher and you are going to have fewer options."

So, by all means, if you have a balance transfer offer in hand that gives you a lower interest rate, go for it! Just be wary of high balance-transfer fees. Sometimes these fees are substantial enough that they negate the benefit of the lower rate you just snagged.

That's why I want to put one other option out there. You can often negotiate for a lower interest rate with your CURRENT bank. It's an old-fashioned idea that still works. All you do is call up your credit card company and politely ask them to lower your interest rate. Naturally, you will also mention that other card companies have offered you a lower rate, so if this company doesn't help you, you will take your business elsewhere.

We tried this with a bunch of young "Good Morning America" employees and it was a grand success. We showed off their results live on the show. Here's what a few five minute phone calls accomplished:

Benefit of Asking for a Lower Credit Card Rate

Those simple phone calls can make a big difference in how much and how long it takes to pay off your credit cards. In the post-crisis economy, you may not be able to achieve as big an interest rate cut, but the fact remains that it is easier for a bank to keep a current customer than to get a new one so it's quite possible the bank will work with you.

ABC News Live

ABC News Live

24/7 coverage of breaking news and live events