28 Mar The World Is Your Market, So Haggle and Negotiate
Your debt is your debt.
That might seem like a wierd statement but this needs to ring clear. Your debt is not the bank’s/person-your-loaning-from/creditor’s debt. It’s not Visa or Mastercard’s debt. Your debt is your debt! It goes where you go…and you can go many places and not enough of you do.
What am I talking about? I’m talking about negotiating your loan rates. No one talks about this and I can’t figure out why. Look, it doesn’t matter if it’s credit card debt, your morgtage rate, student loan debt or debt from that couch you should’ve paid off while it was interest-free for 12 months and now its 20 months. This is what matters…
When You’ve Got Skin In The Game, Play the Damn Game
This is a game. It is a game of loans. You have power over your debt and if your interest rate on something is high, you MUST negotiate. Let me give you a list of money I’ve saved in the past six months from negotiating:
- Called DirectTV and got $20/mo. off my subscription for the next 19 months ($380 saved)
- Audi dealership wanted $5200 to fix a big piece on my car. Got it to $4100. ($1100 saved)
- Pizza I ordered the other day and got them to give me a coupon special ($8 saved)
- A business service I use added 25% off a $1000 order when I said no to the initial offer ($250 saved)
This is a way of life for me and it should be for everyone. So many people I talk to are uncomfortable with the idea of haggling or negotiating. Many of these things I saved money on, I literally just said “no thanks” to an initial offer and let them counter or I called and asked one time.
If you have credit card debt then PAY ATTENTION. Call your credit card company right now and tell the customer service representative you are trying to pay down your card and need a lower interest rate. 58% of the time, they will lower it ON THE SPOT!
They don’t even have to get a manager much of the time. And if they give you a hard time about it, threaten to transfer your balance to a new credit card. And if they still don’t do it, then transfer to a new credit card!
YOU have the power. YOU are in control of your debt. YOU can get a lower interest rate and save hundreds of dollars a month!
Give Yourself A Raise
You work hard to earn your money! Why wouldn’t you want to keep more of it? Interest is simply money you are paying to some person/business to borrow their money. Everyone wants to loan money because its easy money! So why don’t more people shop interest rates? Do you do this atleast once a year?
Even if you locked into a 30-year mortgage or 6-year car loan or 20-year student loan, you can renogiate and/or transfer the balance to anywhere else that will take you! And there’s no shortage of those. Seriously, start paying them less and start paying you more! Here’s some simple math…
If you have $10,000 in debt at a 12% interest rate, then you are paying $1200 to borrow that money. If you negotiate that down to 8%, then you have just cut the rate, not by 4%, but by 33%!
The wrong math is to think “I lowered my rate from 12% to 8% so its a 4% difference.” This is wrong for two reasons.
- The math is just plain wrong. You divide percentages.
- Saying you cut your bill by 4% is not very motivating but 33% is very motivating!
So that 33% rate is saving you $400 on that loan! You just gave yourself a raise! Most of these things I talked about you can do in about 30 minutes or less. What else can you do in an hour and make hundreds of dollars? Brain surgery? Rocket science? Own a multi-billion dollar company? Most of us aren’t in a position to take advantage of those so do the easy thing…make a phone call…ask a question…give yourself a raise!
Here’s a Big Tip – “Spring Cleaning in December”
This is the system I use. Yes, I do obsess over this stuff a little more than the average person and that has nothing to do with the blog or social media accounts. It has to do with winning. I like to win and I view as paying high interest as losing.
So while you can negotiate things as they come due, I take a different approach. I take one day a year to do “spring cleaning” even though I tend to do it in November or December. I call it spring cleaning because if I said winter cleaning nobody would know what the heck I’m talking about.
A lot of companies that loan money have to report their income to Wall Street or their board at the end of the year (though not all companies are set up that way). That means they DO NOT want to lose business and are much more likely to negotiate with you at that time than in the middle of the year.
So I take a day or afternoon to get all my bills together and call competitors and get quotes. I’ll usually call about 2 competitors for each one. This can be a bit time consuming, but is there anything else you are doing that is going to make you hundreds or thousands of dollars in an afternoon? I didn’t think so.
So if you get someone to give you a quote that’s better than what you are paying now, call your current creditor or insurance company or whatever and tell them what X competitor is offering you. If they can’t or won’t beat it, then swap companies. Boom. Instant raise. Now go buy yourself something nice (and invest the rest!).