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Ask Jean: Credit Card Interest Rates

Hi Jean,

I’ve watched you on TV for many years and I love your money advice!!  I put a budget/plan in place about a year ago to pay back about $20,000 in credit card debt. My strategy is to pay more than the minimum on the highest interest card as well as calling each company every 5-6 months asking for an interest rate reduction.

What has prompted me to write to you today is a phone call I made last night to my Citi MasterCard. It’s my highest balance and highest interest rate card of 15.22%. In the past year I’ve called twice have that reduced from 19.99%. The man said he was looking into “a couple of programs” to see if the interest rate could be reduced. The first “program” was a minimal reduction, he didn’t say what that reduction would be. He looked at a second “program” and said wow, this one is much better. I can lower it to 9.22%!!

My question is how can these credit card companies be so arbitrary in their charges for repaying debt? The last phone call I made 6 months ago to that same card only got me a .25% reduction. How long was I really eligible for the “program” that allowed my interest rate to be lowered to 9.22%?

Thank you so much for your time!! Look forward to hearing what you think about this!!

Sincerely,

Marcia

Hi Marcia,

This is tough, because it does seem very arbitrary on the surface (and it may, in fact, be a bit arbitrary, because in my experience, it can really depend on who you talk to. If at first you don’t succeed, try, try again – and ask for a supervisor.).

But I called Citi to find out more about their process for lowering interest rates. This is what they told me:

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