Taking control amid the chaos

2 ways to use your power in the face of rising interest rates

For the past several months, writing the first draft of my book has consumed my life. Days have been devoted to my day job, while early mornings, late nights and both days of the weekend have been all about slowly making progress toward finishing my manuscript and most anything else has taken a back seat.

That day-in, day-out commitment helped me feel more in control during the process. For most of the last few months, it felt more like a slow, steady process than a frenetic sprint.

It had been that way since about Labor Day, and while it has been incredibly fun and rewarding, it has been exhausting, too. But now, the first draft is finally done, and I find myself in a bit of a calm before the next storm strikes. For a few days, I’ve been able to catch my breath, reacquaint myself with my family (who has been incredibly patient through this whole thing) and generally settle back into a bit of normalcy — all the while knowing that it won’t be long until life shifts into fifth gear again as we work toward finalizing the book.

A chaotic time

Still, I’m hardly the only one who would welcome a bit of calm. The American consumer would LOVE some of that after a year in which the price of everything seemingly rose by the day, and the Federal Reserve tried to fight it by raising interest rates about every 20 minutes. (OK, they actually did it seven times, starting in March 2022, but it’s still a ridiculously large amount.) Just since I last sent posted here back in September, the Fed raised rates three times.

What does it mean when the Fed raises rates? It means that it gets more expensive for people to borrow money. For example, when the Fed raises rates, the vast majority of credit cards in this country see their rates go up as well. So if the Fed raises rates by three-fourths of a percentage point, and your credit card’s interest rate was 20%, it means that within a month or two, your credit card’s new rate is going be 20.75%.

That’s not just for new things you buy. It applies to your current balance, too, unfortunately. For the average American, who is already struggling with the crazy-high prices of groceries, utilities and other basic costs of life, it just makes things that much harder.

How you can take some control

But, “Ask, Save, Earn” readers, the good news is that you have options. You have to pursue them and make them happen, but they are out there. Here are two of the best ones:

• A 0% balance transfer credit card: It may sound weird to fight credit card debt by getting a new credit card, but these tools are one of your best weapons against credit card debt. You’ll likely need good credit to get one (like a 680 FICO score or higher) to get one, but if you can, they can be a game-changer because they let you avoid accruing interest for a year or more. There are typically fees, limits, deadlines and other important details to be mindful of, but even with all that fine print, these cards can be a huge help. This piece I wrote for LendingTree earlier this month about these cards can give you the lay of the land before you apply.

• Calling and asking your credit card issuer for a lower APR: 70% of people who asked for a lower interest rate on their credit card in the past year got one, according to a 2022 LendingTree survey. People are always surprised to hear this. In fact, I mentioned it live on Yahoo Finance earlier this month and the interviewer interrupted me mid-sentence to ask more about it because he had never heard it before. (It happens about 2:05 into the clip.) However, it absolutely can work. The best way to approach it is to come with ammunition in the form of an offer that you’ve seen in your email, snail mail or at a site like LendingTree. You can use that to frame the conversation. (“I’ve had your card for many years and always been a good customer, but my APR is 24% and I’ve just been offered a card with a 19% APR. Can you work with me?”) There’s no guarantee you’ll get your way, but it is certainly worth asking.

Embrace your power

That’s the idea underlying my whole book: You have more power over your money than you realize, but you have to be willing to ask.

In the book — we haven’t settled on a title yet, but I’ll let y’all know when we do — we look at how this idea relates to not just credit card rates and fees but also medical bills, mortgage costs and even relationships with friends and family. I can’t wait for y’all to see it.

Have you ever negotiated a lower rate on a credit card? Whatever your negotiation success story, I’d love to hear it. Leave it in the comments below.

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