Credit Cards and Debt Interview with WYAY Radio Atlanta
Interviewer: It’s time to make your resolutions. Live healthier, make more money, pay off some debt, some of the top resolutions that we make every year. While we can’t help you with the first two, well, maybe we can with that last one. As people work toward a debt-free 2016, Matt Schulz of CreditCards.com is with us. Matt, what is the one thing that people should do when they are talking about paying off those credit card bills?
Matt Schulz: Well the most important thing that you can do or certainly one of them that people might not realize is an option is to call your card issuer and ask for a lower interest rate. We did a survey a while back, and while only about one in four cardholders had ever asked for a lower interest rate, about two-thirds of those who asked were successful, so that means a lot of people are paying a lot more interest than they need to.
Interviewer: Why do we delay in asking for that? I guess we just don’t know?
Matt: Well I think that a lot of times people don’t realize the pull and the power that they have in these situations, and now is such an incredibly competitive time in the credit card marketplace that consumers really have more power than they’ve had in a long time.
Interviewer: We’ve had those offers to transfer balances as well for lower rates.
Interviewer: That can be dangerous though, can’t it, if you don’t pay attention to that?
Matt: Yeah you really have to know the rules because there’s a lot of deadlines and a lot of kind of stipulations involved. Like for example, many cards will come with a deadline that says you have 60 or 90 days after you get the card to do the transfer, or you can lose the opportunity to get that rate, but that said, if you do take care of your business there are some good deals out there like the Slate from Chase card for example, which gives you no interest for 15 months and no balance transfer fee for 60 days.
Interviewer: Wow. Okay, so I’m trying to pay off my credit card bills and I’m doing a pretty good job of it, but six months later I may have just as large a credit card bill as I did before. How can I avoid that?
Matt: Well it’s really all about knowing yourself because if you were somebody who for example has a lot of debt and is considering a balance transfer card, it might not be a good option for you because what might end up happening is that you might just see all of that extra available credit that you have and you might just go shopping. In that case it’s really not a good move. So it’s really important to know yourself and know your tendencies.
Interviewer: Matt, something that occasionally I get caught up with is that I either will be traveling, know I’m gonna be traveling or whatever, so I’ll go ahead and make a payment. Let’s say it’s not due yet, but I’ll make it before the due date so it basically comes up like two payments in one month. Then I get hit with a late fee. Then I have to correct it ’cause they say “Well you didn’t pay it.” That’s a little screwy to me. Do you hear complaints about that?
Matt: I haven’t heard a whole lot of complaints about it, but I do know that if you time it correctly, making multiple payments in a month can actually be a good thing for your credit score because what can happen is your credit score is basically just a snapshot of what your credit is at a given time. So if you’re somebody who spends $10,000.00 in a month, your business for example, but you pay that all off at the end of the month, depending on when your credit is pulled it might show that you have a $10,000.00 balance, it might show you have a $0.00 balance. So if you kind of break that up you can lower the likelihood that your balance is going to be really high when your credit is checked.
Interviewer: Interesting. Like I say, occasionally I’ll make two payments. They correct it, but at the time they go – anyhow. Good advice, Matt. Thank you very much.
Matt: Thank you.
Interviewer: We’ve been talking with Matt Schulz with CreditCards.com about how to help you bail out of all this fun Christmas stuff you’ve been doing.
Interviewer 2: Here’s a radical idea, don’t spend more than you can afford to pay off at the end of the month.
Interviewer: How about pay cash?