For the past two months while waiting to receive back my rent deposit check, and earn a bit of money from the summer job, I’ve been unable to pay off my balance in full from my AmEx account.
When I first signed up for the card I was more concerned with the awards (Airline Miles) than the finance charges ($40 annual fee, $4000 credit limit, 17.99% APR). At the time I was booking a lot of work related travel on the card, and getting compensated within the month, so I never missed paying in full. As for the fee, I earned 3 free round-trip flights in 2 years, so the $80 I paid was easy to stomach.
As I built up my credit the limit increased to (I think) $12,000 and the APR dropped by 3 percentage points.
This past year, due to the timing of student loan dispersement, and the lag between moving and working, there have been months where I couldn’t pay off my balance in full. Getting tagged with finance charges has been a real drag, and I’m finally doing the responsible thing by transferring the balance to a 0% APR introductory APR card. (I’m actually looking at the Citi Bank Upromise World MasterCard, which is linked to my student loans and earns 1% of all purchases toward my loan balance… but if you have better suggestions, please offer them).
Anyway, the “adult” thing I learned is that you can call up AmEx and basically say, “I think my credit history deserves a better APR than the one you’re offering.” In two minutes, I negotiated a percentage drop of another 3%. I’ve also read that some of the time you can get the annual fee waived as well.
The next thing I need to do is get on shopping around for my student loans. I was lazy last year and I know I didn’t get the best deal as a result. (Well, I potentially got a good deal, but it’s one of those “make 48 consecutive payments to earn a 1.5% discount!” that I bet only 50% of the population ultimately end up qualifying for.)
It’s strange that it took me until the age of 25 to seriously research and understand basic personal credit. I really wish personal finance would have been a “home-ec” type class in high-school. Ah well. Live and learn.
1 response so far ↓
John // June 18, 2008 at 9:10 pm |
You can actually do better than calling them up. You should ask for a reduction every three or four pay periods. As long as you’ve been on time, they’ll reduce your APR. I just log into my online bill pay every few months and ask for a better rate. I’ve never been told “no” yet.