If you're struggling to stay ahead of your bills, the last thing you need is a high interest rate credit card. It's frightening how much money, not to mention sleep, you could be losing. If you have five minutes, a simple phone call to the bank or credit card company could slash the interest you pay on your credit cards dramatically, save you hundreds of dollars and get those cards paid off faster than you ever thought possible.

The U.S. Public Interest Research Group [PIRG] proved that the strategy of simply calling the bank and asking for a lower rate on your credit card works surprisingly well. They found that 56 percent of their January 2002 survey volunteers successfully reduced the interest rate on their cards simply by calling the bank and asking. The volunteers reduced their rates by an average of one third, from 16 percent to 10.47 percent. That's a substantial cut.

One cardholder in the survey had no idea she'd been paying an absurd 31 percent penalty rate until she called. Her rate was cut by more than half to a more reasonable 14.65 percent. Another guy got a zero percent deal on his card for six months.

Industry competition for new cardholders is intense. Banks spend hundreds of dollars for each new customer they acquire. Think about it. They'd much rather lower your interest rate and keep you as a customer than spend the money to replace you. That 5 minute phone call could save you a bundle.

The odds are slim to none that your credit card company will call you first. They're already making plenty of money from you so there's no incentive for them to lower your interest rate - unless you ask.

Your chances of success are best if you have been a good customer for some time, you haven't maxed your card and you always pay on time.

When you call, be polite, but don't let them make excuses. Point out how you've been a loyal customer for years with a good payment record. You might mention that you have several offers for lower rate cards from their competitors sitting on your desk and that if they won't beat or match the offers you'll be taking your business elsewhere.

If you run into a stubborn customer service rep, hang up and call back later. Odds are, you'll get someone who's more cooperative next time. Be the squeaky wheel that gets the oil. What are you waiting for? Make that call and ask for a lower rate on your credit card. That five minute phone call can make a big impact on the amount of interest you'd otherwise pay over the next few years. More importantly, it can mean the difference between having barely enough to pay the bank or finally having some money left over for yourself at the end of the month.

Learn more about this author, John McDevitt.
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