​​​​Credit Cards

The Scene: Amber and Dylan are driving back from their first date. Amber asks Dylan to help her build a Cash Machine of her own. When Dylan finds out she’s carrying a balance on her credit card, he tells her this is the first area of improvement they’re going to make.


“Is the credit card with the balance in your purse?” Dylan reached over to grab my purse from the backseat, then stopped. “Why are you pulling over?”

“I’ll get the card out.” It was a bit too early in our relationship to have a guy digging through my purse. Especially this time of the month. “What are we going to do with it?”

“We’re going to call your credit card company.”

I grabbed the card and clenched it with an iron grip. “You’re not going to cancel the card, are you?”

“That all depends on what we find out.” Dylan yanked the card out of my hand.

So much for my iron grip. I fought down the urge to grab it back. Nonetheless, I wasn’t willing to relinquish all control. I gave him my fiercest schoolmarm look. “You’re not canceling my card.”

Dylan held up his hands in defeat. “Fine, I promise I won’t cancel it.” He pulled out his phone. “At least not today. I’m just going to call and see what I can find out. OK?”

“You drive.” I unbuckled my seat belt. “I’ll call.”

Dylan went around to the driver’s side, and I slid over the middle. An eighteen-wheeler drove by, and Dylan pulled in behind it. The oncoming traffic lane was soon empty, but Dylan made no effort to pass. It drove me nuts to drive this slowly, but I had the haunting feeling that if I told Dylan to floor it, he’d give me some lecture about fuel efficiency.

At the sound of the automated service, I entered my digits and asked for a representative. After about five minutes, the road widened as it went uphill, and Dylan finally eased past the truck. Just as the road narrowed back into a single lane for the downhill, the representative finally picked up. After a long, canned introduction thanking me for my business, she said, “This is Candice. How can I help you today?”

I turned to Dylan and shrugged; I didn’t know the purpose of the call.

“What’s your balance?” he said.

I asked Candice, but before I got a response, Dylan said, “Put it on speakerphone. I want to hear.”

The woman’s voice boomed out of my phone. “As of today, your balance is $6849.71.” I quickly turned down the volume.

“At what interest rate?” Dylan called out.

“I’m sorry,” Candice said, “but I need authorization before I can discuss the details of the card with anyone but the primary cardholder.”

“It’s OK, I authorize,” I said. “You can answer his question.”

“Yes, ma’am. Your current interest rate is 23.99%.”

Ouch. I had no idea it was so high.

Dylan lifted his eyebrows. “What’s the lowest possible rate you can give her today?”

These reps were too well trained to lecture or laugh at us, but I pictured Candice rolling her eyes in her cubicle. You can’t just call up a major bank and negotiate with the phone representative.

“One moment while I check on that for you,” Candice replied.

Wait. Was she looking into this?

“My records show that you have been a loyal customer for five years and have never missed a payment. In thanks for your loyalty and perfect payment record, I’m authorized to reduce your interest rate to 12.99% today. Would you like me to go ahead and do so?”

Hell yes! I regained my composure and politely said, “Please, that would be wonderful.”

“Your new interest rate will go into effect as of today. Is there anything else I can help you with?”

I was about to say, ‘no, thank you’ when Dylan spoke. “Are there any membership rewards on this card?”

“No, sir. It is not currently enrolled in our reward program. Would you like me to enroll you today?”

Yeah!

Dylan said, “What are the terms of your reward program?”

“On this card, one point will be accrued for every dollar spent. Points can then be redeemed for cash back, purchases, or travel.”

“Is there any cost for the program or an annual fee on the card?”

“No, sir. There is neither.”

Dylan winked at me. “Then yes, please enroll the card in the program.”

I turned to him with my jaw hanging low enough to clean the floor of the car.

“The card is now enrolled. Is there anything else I can do for you today?”

Again, Dylan jumped in before I could refuse. “Yes, what is the credit limit on this card?”

I heard the click of Candice’s keyboard as she searched for an answer. “It’s currently set at $14,500. Would you like me to check if it’s eligible for an increase?”

Dylan nodded toward me. “Please.”

“One moment, sir.”

My face contorted in confusion. “Why do I want that?” I whispered. “I figured you’d want me to lower my balance, not increase it.”

Dylan’s fixed me with a hard gaze. “The extra money isn’t for spending, so don’t get the increase if you think it will tempt you.”

“I’ll be a good girl,” I said, smiling as innocently as I could. “But why get it if I can’t spend it?”

“It raises your credit score.”

“Really?”

“One of the factors they evaluate is the percentage of your available credit you’re using.”

I cocked my head. “So raising my available credit lowers the percent I’m using, is that it?”

“Exactly.” I found the confidence in Dylan’s voice incredibly attractive. I liked how he was taking charge, but wasn’t going to let on. I was still beyond hesitant.

“And my credit rating is important because…”

“Because it can determine whether you’ll be approved for a mortgage and under what terms.”

Candice came back on the line. “Your card has been approved for an increase to $22,000. Would you like me to put that through?”

“Yes, please,” I said.

“Your new credit limit is available immediately. Is there anything else I can help you with today?”

Dylan jumped in again. “Have there been any fees assessed against this card recently?”

“Yes, sir. Last month there was a $29 return payment fee.”

I shrunk against my seat. “I didn’t have enough in my checking account at the time,” I said, only loud enough for Dylan to hear.

Dylan ignored me. “Are you able to waive that fee, Candice?”

I sat up again. “Are you serious?”

Candice, of course, took it all in stride. “Yes, sir. As a courtesy, we’re able to do a fee waiver once every six months. Would you like me to go ahead and put that through?”

“Yes, please,” I said

“The fee has been waived, and you will see the credit on your next statement. Is there anything else I can do for you today?”

I sat in stunned silence, waiting to see what else Dylan was going to pull out of his hat, but he just shook his head. “No thanks.”

“Thank you again for being a loyal customer and have a great day.”

The line cut out, and I lifted my chin from the floor. “Holy crap. You just cut my interest in half. Do you mean I could have been doing this all along?”

“Absolutely.” Dylan sat taller. “Plus getting 1% cash back.”

My tush did a little victory dance in my seat. “That’s awesome.”

“Not really. I wouldn’t recommend you stick with this card. For now, I just wanted to show you the power of asking. This woman had to hit a single command on her computer, and it spit out a new interest rate. But the bank has no incentive to offer it to you on its own. As long as you’re happy paying the higher rate, they’re content to let you do so.”

“Why are they willing to reduce it at all?”

“Because the type of people who ask for lower rates are also the type who compare cards. You pay on time, so you’re a low-risk client, and 12.99% interest is still a fortune. They’d rather have that than lose you.” Dylan eased the car toward the exit.

“You think I can do better than the deal you just got me?”

“Far better. That’s your other assignment for this week. I want you to research available cards.”

“Got it. So I’m supposed to figure out the best one to move over to?”

“Not one.” Dylan lifted his index finger, then opened his hand wide. “Ones. I expect we’ll start you off with at least five.”

“Five cards? Is that also to raise my credit score?”

“No. Getting new cards might even hurt your credit short-term. It’s only on existing cards where raising your limit can pad your credit rating with no downside.” He gave me the don’t-mess-with-my rules look my father used to throw at us when he and my mother would leave us home alone. “Unless you’re tempted to spend the extra money, of course.”

“But if not for the credit rating, what’s the advantage of all these cards?”

“You have to consider credit from the bank’s point of view. They’re watching out for their bottom line, not yours. They’ll give you massive incentives in one area to draw you in, but there’s always another area where they’re hoping to make their cash.”

“So either way, they screw you?”

“No, you screw them!” Dylan banged on the dashboard. “Once you know the rules, you can turn the game in your favor. I have twelve cards myself.”

Twelve? “Why so many?”

“To maximize incentives. Some give me a huge bonus for joining. Others give me cash back in one category or another. Last year alone, I made over $2000 in credit card sign-up bonuses and over $3500 in cash back rewards.”

My mouth fell open again. “$3500?”

“Yep. I get between 2% and 5% back on every dollar I spend. All financed by those undisciplined folks who pay 23.99% interest on their cards.”

“Hey,” I said, slapping his arm, “That’s not nice!”

“I thought there was no physical contact until you were ‘sure’ about me?”

I had to purse my lips to keep from grinning. Dylan was beating me at my game as much as he was playing Visa and Mastercard like financial fiddles. I quickly turned the subject back to money. “How did you possibly spend enough to get $3500 cash back?”

“Remodeling houses.” Dylan turned into his neighborhood. “Some of that stuff isn’t cheap.”

“That’s all for the houses you own?”

“No, most of it came from work projects. My boss reimburses me for expenses for the places we’re working on. He offered me a company card, but I’d rather use my own and get the rewards.”

“So when researching cards, what should I be looking for?”

“First off, we need to deal with your current card balance. The cards that have strong rewards programs won’t be a good solution for that. Those cards probably have at least a 3% balance transfer fee. Instead, you’ll transfer your balance to a card that offers 0% balance transfer fees and gives you a 0% introductory interest rate. That card won’t offer you any rewards, but it doesn’t matter. You won’t be making any purchases through it anyway.” Dylan turned onto his street.

“Are you saying I’ll be able to get the interest on my current balance down to nothing?”

“Absolutely. As a general rule, you never want to pay credit card interest.”

“A general rule? That means there are exceptions, right?”

“Oh, yes.” He slowed the car to a stop in front of his place.

“Like when?”

Dylan got out of the car and grabbed his pack from the back seat. He leaned down so he could look me square in the eye. “Like when you’re a hell of a lot savvier than you are now. Until you know exactly what you’re doing, stay away from credit card interest.”

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