I am sure all of us are familiar with the concept of balance transfers. However, what if you are a person who is extremely diligent in seeing to it that there are not balances on your credit card ? How can this apply to you ?
I came across a credit card related post today - 3 Steps to Take When Credit Card Companies Raise Your Rates. It got me thinking about something. I am currently in a situation where I am repaying a high interest rate loan and am looking at options to refinance it. There are many more variables to the equation and a simple yes or no might not necessarily be the answer. But in my quest to find alternate ways to repay the loan, I have been talking to various banks and trying to see what they have to offer. I have also been looking at new credit cards with 0% APR. Something that I did not look into till now was my own credit card.
I do not keep any balance on my credit card and treat it pretty much like a debit card, paying it off as soon as I use it. I am sure they look at me as a valued customer. I could use this to my advantage. I called up my company and mentioned that I was considering taking a loan. As soon as I mentioned this, they got extremely excited. They told me that the rates vary on a day to day basis but today I qualify for a 1% loan for six months and 4% loan for 12 months for an amount equal to my credit limit.
I said I would call them later. I am sure that if I had continued talking and expressed my concern in borrowing the money, they would have further reduced the interest rate.
I personally still need to decide if this is the best option for me. However, the point I wanted to make was that before you consider transferring the balances on your existing credit card onto another card with a lower rate or before taking a loan, talk to your existing credit card company and see what they have to offer. You might end up with nothing or you might strike gold. But what do you have to lose other than 10 minutes talk time.