Credit Cards and Debt Interview with KNX Radio Los Angeles
Interviewer: Have you made your New Year’s resolutions yet? Have you broken them yet? One of the most popular resolutions is to pay off credit card debt but it turns this one you might actually be able to do. Matt Schulz is with us now, Senior Industry Analyst at CreditCards.com. And Matt I think a lot of people do not want to even look at their credit card balances because it seems such a lost cause. Give us some advice here for those ready to tackle this and bring it all down in 2016.
Matt Schulz: The biggest piece of advice is to absolutely not keep your head in the sand as far as your debt goes. Take some sort of action. That is so important to get the ball rolling. And one thing that people can do that they might not realize is that they can call their credit card issuer and ask for a lower interest rate. And even though only about one and four credit card holders have ever done that. About two-thirds of those who asked actually were successful. So that means that a lot of people are paying more interest than they need to.
Interviewer: So the old expression, if you don’t ask the answer is always no. So that makes a lot of sense. And if you get a no first should you ask for a manager or where should you go from there?
Schulz: You can certainly ask for a manager or you could just threaten to take your business elsewhere. And it is such a competitive marketplace that credit card issuers are much more likely to work with you for fear of you going someplace else.
Interviewer: All right. And of course the FED just raised rates just recently. The short term rates going up. How are the rates looking now? Have you seen an increase in credit card rates this month?
Schulz: Interest rates have been pretty flat for the last couple of years and though basically everybody’s credit card interest rate is going to go up by that quarter point that the FED raised rates we haven’t seen it as a whole being used as an excuse by credit card companies to take another step beyond that.
Interviewer: What about balance transfers? Are there some good deals out there being offered by some of the companies?
Schulz: Yeah. The amount of time that you can have a 0 percent offer it seems like it’s getting longer and longer. We have seen a card like the Slate from Chase which is offering no interest on balance transfers for 15 months. And then the City Diamond Preferred card which is offering no interest on balance transfers for 21 months. And that’s the longest one that we’ve seen.
Interviewer: And then of course determining why you get into debt in the first place. That is a big issue. Obviously the cost of living is very high. And interest rate on credit cards pretty much the sky is the limit. So what should people do to consider their situations here?
Schulz: It is really important to know yourself. Are you somebody who is just in a temporary bad spot because of medical emergency or joblessness or are you somebody who just has trouble paying the bills or resisting the urge of extra credit. And once you know those things about yourself you can really start to lay the ground work for an attack plan that will really work for you for tackling debt.
Interviewer: And if it does get so overwhelming what about bankruptcy?
Schulz: Bankruptcy is always an option but it can be really devastating to your credit. But the good news is is there is plenty of stuff that you can do before bankruptcy.
Interviewer: And you have given some great examples here. Matt great to connect with you. Matt Schulz Senior Industry Analyst at CreditCards.com. Happy New Year to you Matt and look forward to speaking to you in the New Year.