Ramit Sethi Reveals How To Save Thousands Of Dollars With A 5-Minute Call: 'Here Are The Exact Words To Use'

If you're deep in debt, a five-minute call can save you thousands of dollars. That's what financial guru Ramit Sethi told his followers in a recent video about getting out of debt. He even offered a script you can use to ace the call.

"Here are the exact words to use," Sethi explained.

Essentially, Sethi is recommending that anyone in debt call their credit card company and ask for a lower APR. Credit card companies are not required to fulfill any requests, but knowing the basics of negotiating can go a long way in securing a more favorable APR.

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Start The Request With A Promise To Pay Off Debt

Credit card companies want you to have a balance, but they also don't want you to default on the debt. If you have a high balance and have only made the minimum monthly payments, you can explain to your credit card company that you will commit to aggressively paying off the debt next week.

These are the exact words Sethi recommends using when you make this request. Note that you don't have to use the exact words, but they serve as a good guideline.

"Hi, I'm going to be paying off my credit card debt more aggressively beginning next week, and I'd like to lower my interest rate."

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Give Yourself Leverage

This request may not be enough to secure a lower interest rate. The representative may press you on why you need a lower interest rate, but Sethi came prepared in his video. His recommended approach is to leverage the fact that you have been a long-term customer and that other credit card companies are offering better rates.

If you are in credit card debt, the company has made a lot of money off you over the years. They don't want to lose you, especially if you have been a loyal customer for several years.

Sethi's example depicts someone who has been a customer for eight years. These are the exact words he recommends.

"I've decided to be more aggressive about paying off my debt. Other cards are offering me rates at half [of] what you're offering. Can you lower my rate by 50% or only 40%? I've been a customer for 8 years, and I'd prefer not to switch my balance over to a low-interest card. Can you match the other credit card rates, or can you go lower?"

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Switch Your Credit Card If Necessary

Even with Sethi's script, your credit card company may not budge. In that case, you may want to switch to a credit card that has an intro 0% APR offer for the first 12-24 months. You will enjoy a lower interest rate that will make it easier to pay off your debt.

This strategy is optimal if you have a high balance that will take several months or years to pay off. Your current credit card company and your new credit card company will both likely charge transfer fees. If you have a small balance or can pay it off in under six months, it's usually better to stay put.

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