Money To Live

September 19, 2008

Review: Pay It Down by Jean Chatzky

Filed under: credit — by moneytolive @ 5:00 am
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Jean Chatzky’s book Pay It Down is a great personal finance book. It is full of ways to reduce monthly expenses in order to pay down debt. Even if you are not trying to pay down debt, the ideas can be used to free up more cash.

My favorite part of the book is a script to use with a credit card company to negotiate a lower interest rate (starting on page 67). Chatzky quotes a 2002 study that calling and asking for a rate reduction results in a reduction 56% of the time. I like it that Chatzky gives a script because the people on the other end of a line have a script.

Though it can be intimidating to call and ask for a rate reduction or for fees to be waived, nothing bad can happen. The worst possible scenario is that nothing about the account changes.

A few years ago I paid a credit card bill a few days late. I was busy and forgot to pay the bill, but I had the money and was able to pay the balance in full as soon as I remembered. When I remembered, this is what I did:

  • I paid the entire balance online.
  • I set up an automated payment plan. On the day the payment is due, the entire balance is withdrawn from my checking account. In general, I am cautious to set up automatic withdrawals from my bank account (as are a lot of people). But since I already had a problem remembering to pay the bill and late fees can be steep, I pay this one automatically.
  • I called my credit card and asked that the fees be  waived. The account had been open for several years, and I never made a late payment or carried a balance. The first customer service agent I spoke to said that there was nothing she could do. I asked to talk to her supervisor; she said that her supervisor would not be able to do anything for me. When I talked to the supervisor, though, she immediately waived the fees.

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