A Brilliant Way To Lock In Lower Interest Rates – Do A Balance Transfer And “Opt Out”

Anyone who has worked in the credit card business for any length of time has seen periods like this one, in which masses of credit cardholders are hit with significant changes in the terms of their credit card accounts.  

We, who are not the CEO’s making these decisions, recognize that these changes are an integral part of profit making and the profit-taking cycle that credit card companies engineer, and that they seldom have anything to do with any current economic conditions.  

As far as I can tell, the company for which I work has billions in assets and is in no economic danger.  

So it seems, to me, that right now is a bad time for lenders to be aggressively pursuing this profit making strategy when it is at the expense of people who are already struggling.  

A lot of customers agree. And they are fighting back.

DO A BALANCE TRANSFER AND THEN “OPT OUT” 

In the interval between now and the middle of May, when millions of credit card customers will see increased interest rates on their accounts go into effect, they are pursuing a brilliant strategy.

Those people who have low interest rates of around 4.9% or lower are still receiving literature in the mail, with their bills, which urges them to make balance transfers to their accounts, even though they have been notified that their interest rates are about to triple.

“What do they think? That I’m stupid?” one guy asked.

They are certainly hoping you are. However, if you’re in that situation you can make your credit card company the stupid one. You can have the last laugh.

Right now, a credit card customer who still has a low rate can transfer balances from his other cards to the low interest credit card account and THEN SELECT THE “OPT OUT” PROVISION on the account to which those balances have been transferred.

As long as you are able to transact these balance transfers and select the “opt out” provision BEFORE the date on which your new interest rates go into effect, you can have all this debt locked in at your old low interest rates, no matter how long it takes you to repay these loans.

Just make sure your credit limit is high enough to accomodate transferring the debt before you start jumping up and down in glee.

Also, understand that you cannot lock in a promotional rate. The rate must be the regular rate on your account.

AN EXAMPLE

 A guy who just has just had his rate jacked up to 19% on another card called in. He had also gotten notice that  his rate on the card issued by the lender for which I work would be tripled to 14.7% on May 10th.

He owed about $3,000.00 on that other card and he had about $7,000.00 on “our” card.

Since he had a credit limit of just over eleven thousand dollars, he transfered the $3,000.00 to “our” card which has a 4.9% interest rate until May 10th.

He’s going to call his other card company in a few days to confirm that the transfer went through and that account is paid off. Then he’ll check his account with “us” (and I use the word loosely) to confirm that all his debt, including the new transfer, is still at 4.9%.

THEN he’s going to select the “opt out” provision for his account and opt out of the interest increase.

This will have the effect of freezing the entire ten thousand dollars worth of debt at 4.9% for as long as it takes him to pay it off.

As a result, he will get out from under a mountain of future interest, and possible financial ruin.

Brilliant! And it’s perfectly legal.