How to get a lower rate on a credit card
MONEY TALK
Having a high credit score gives you the best leverage. Otherwise, you'd better try to pay off your balances.
Dear Liz: I accumulated a lot of credit card debt in college. I recently started a full-time job in my field and am working to pay off my debt one card at a time. I am considering asking my creditors to lower my interest rates to make a daunting task more manageable. Is this a good time to do that, given the current financial crisis? Are creditors willing to lower their rates now? Should I wait until the market improves or until I've been working longer?
Answer: What matters to credit card companies, more than ever before, are your credit scores.
People with high scores still have access to cheap credit, even as credit card issuers are raising interest rates and tightening lending standards for everyone else.
Your first step is to find out what your scores are. The scores that most lenders use are known as FICO scores, and the only place to get all three of your FICOs (one for each credit bureau) is at MyFico.com. The cost is about $50.
If your FICO scores are over 720 or so, you have some leverage to ask for lower rates. If your scores are 760 or above, you're among the most desirable of customers and should be able to drive a hard bargain. If your current issuers won't lower your rates, you can transfer your balances to other, better cards. You'll find competitive balance transfer offers at sites including CardRatings.com and Bankrate.com.
If your scores aren't great, you have much less leverage, although you can always ask for a lower rate or try applying for a lower-rate card. Don't apply for more than one or two, though, because applications can hurt already depressed scores.
If you can't get a better deal, redouble your efforts to pay off your balances as quickly as possible. The longer your debt lingers, the more it's going to cost you.
How the SIPC protects investors
Dear Liz: Recently my brokerage firm took out a full-page ad touting its membership in the Securities Investor Protection Corp. The ad said securities in its customers' accounts were protected up to $500,000.
Until I read the ad, I never gave a thought that my equity shares needed protection. Now I am concerned that this is like the assurances given to investors and employees that all is well right before the company goes broke.
Why would I need any protection for the shares I own of any company? Does this mean that if my account is worth more than $500,000 I could lose the value of my account that's over the $500,000? Do most people with more than $500,000 use more then one broker to keep the value of their account under $500,000?
