My Credit Card Experiment

I've been conducting a credit card experiment over the last year and a half. I've been carrying a minor balance on a single card, and periodically I call up and ask the company to reduce my interest rate. As of last week, they have now done it three times in a row. Each time I call and ask (in my case, the calls are roughly six months apart), I get another 2-5% rate cut. I went from having a card with a painfully high rate (it's an Amazon rewards card, if you must know) to one that's pretty reasonable. My goal is to keep driving the rate down until I hit single digits or the company stops listening to me.

The U.S. Public Interest Research Group did a study in 2002, in which fifty consumers called their credit card companies and requested lower rates. Over half of those who called were rewarded with lower rates, in some cases vastly lower, like cutting the rate in half. (Read more about the study.) The study encouraged consumers to use this simple script when calling the credit card company:

Hi, my name is [Your Name]. I am a good customer, but I have received several offers in the mail from other credit card companies with lower APRs. I want a lower rate on my card, or I will cancel my card and switch companies.

The study also suggested that some bold consumers followed the above script with a request for a 10% drop in interest rate, just to see what would happen -- I guess they're better at haggling than me.

In my case, I just call up and suggest that, gee whiz, I've been getting a lot of offers in the mail (which I really don't, because I opted out years ago), and I've got this balance, and sheesh, I'd like to see about getting a lower interest rate so I don't have to transfer my balance...and voila, they transfer me to someone who is "authorized today only" to give me a lower rate. It's like magic.

Anyone want to join me in this experiment? I challenge you: call the number on the back of your card, spend a maximum of 5-10 minutes on the call, and see if you don't get a lower rate.

If You're an Android User, Your Phone Can Now Filter Out Spam Calls Automatically

It's not just you: Robocalls to cell phones are out of control, and being on the Do Not Call list probably hasn't kept you from fielding multiple spam calls a day. Thanks to technology that makes spamming easier than ever, the FTC now receives four times the number of complaints about automated robocalls a year compared to 2009. But if you own an Android phone, screening all those relentless spam callers is about to get easier, according to Lifehacker.

A new update to Google's Phone app allows you filter out suspected spam callers with the press of a button. If you enable the setting, your phone won't ring if a known spam number is calling. You won't get a missed call notification, either. But, in case it is a legitimate call—or you just want to know who’s spamming you—the caller can still leave a voicemail. In the event that a robocaller slips through (as they surely will) you can also mark specific numbers as spam and block them.

Two side-by-side screenshots of the Google Phone app showing a spam warning and blocking numbers

To enable the filter function, go to the Phone app on your Android device, then click Settings and Caller ID & Spam. (Google's Caller ID function identifies not just people in your address book, but numbers already associated with business listings on Google.) Turn caller ID on, then turn on the "filter suspected spam calls" function.

And remember: If you do accidentally answer a robocall, don't answer any questions. It may be part of a phishing scheme to record your voice.

[h/t Lifehacker]

How You Should Be Spending Your Money, According to a Financial Planner

It would be nice if financial rules of thumb applied to everyone equally, but that's often not the case. People in different income brackets have different priorities, which is why telling everyone they should be spending a flat percentage of their income on necessities like food, housing, and transportation doesn't always make sense. In his book Rules to Riches, financial planner Mark Baird accounts for this variation by adjusting the common percentage guidelines based on income levels, as CNBC reports.

In some spending categories, the rules stay the same no matter how much you're making. Baird recommends that every household earning between $25,000 and $300,000 annually save or invest 5 to 20 percent of their income each year, for instance.

Other financial areas have more variation depending on how much money you're bringing in, though. If your income is $25,000 a year, Baird says you should be spending 18 to 23 percent of your earnings on housing. But if you make $50,000 or more, you should aim to spend 15 to 20 percent. In general, people earning lower salaries should set aside higher percentages of their income for food, clothing, transportation, and medical bills, while those earning more money should plan to spend more of it on taxes, insurance, and charitable donations.

As is the case with any spending-related guidelines, these recommendations shouldn't be taken as law. The money you put toward housing, taxes, and transportation will vary depending on where you live. If costs are especially high for one bill, see if you can cut spending in another part of your life. It's not the end of the world if you spend slightly less on charitable contributions than Baird recommends.

Check out the guidelines for households making $50,000 a year below. You can head over to CNBC for the full chart.

Taxes: 20 percent
Charitable Contributions: 10 percent
Savings and Investments: 5 to 20 percent
Housing: 15 to 20 percent
Transportation: 8 to 10 percent
Food and Beverage: 6 to 10 percent
Clothing: 3 to 5 percent
Furnishings: 2 to 4 percent
Personal Care and Cash: 3 to 5 percent
Medical and Dental: 3 to 5 percent
Insurance: 6 to 8 percent
Education and Self Improvement: 1 to 2 percent
Installment Payments: 3 to 4 percent
Entertainment, Dining, and Gifts: 1 to 3 percent
Vacations and Holidays: 2 to 4 percent
Miscellaneous: 1 to 2 percent

[h/t CNBC]


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