So marketing guru Seth Godin wanted to help everyone out with some spring cleaning. He suggested you call your credit card companies and threaten to cancel if they don’t lower your interest rates. It’s a good idea, but he suggests you’ll save a few hundred dollars.
That’s true–if you have credit card debt. If you don’t have credit card debt, well, it won’t save you anything until you get some credit card debt (which I don’t recommend). I realize credit card debt is pretty standard, especially among my generation. But that should be a bad thing.
Go ahead and get that interest rate lowered if you can, but don’t stop there. Mother-approved spring cleaning would mean paying off that credit card. It might take until the next spring cleaning (or the next one), but that would be worth rejoicing over. Boom.
Just be warned that cancelling your credit can negatively affect your credit rating. Not sure exactly why that works that way, but it does.
Of course that assumes the credit card company refuses to lower your rates, and more than likely the’ll give you at least a little something.
My other concern with Godin’s advice–you can’t cancel a card if you have a balance, can you? So you need to be prepared to pay off your card if they won’t lower your rates and you have to cancel it. Or at least transfer it to another card. And if you have the ability to pay it off, why not just be done with it?
I think you can cancel the card (so you can’t charge to it in the future) without transferring your balance. Visa is still quite happy to continue receiving your payments, including all that interest you owe them. It’s just that your balance won’t go up anymore unless you start skipping payments.