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Dialing for Dollars
Motley Fool personal finance expert Dayana Yochim on four phone calls that can save you more than $700.
You can negotiate $700-plus in savings on everything from your car insurance to your cable bill if you know what to ask for and how. So get into character. (Fake an English accent if that's what it takes to psych yourself up for a negotiation.) Pick up the phone and let the savings begin. Here’s how:
Phone in a more favorable interest rate. Do you carry a balance on your credit card from month to month (even just occasionally)? Call the customer service number and ask for a lower interest rate. Shoot for a rate reduction of one-third (for example, a new APR of 12% as opposed to the current 19%). On a $6,000 balance that you want to pay off in one year, you'll save $198 in interest and about $200 on payments over a single year. This tactic works best for customers with an on-time payment history, knowledge of competitors‘ offers (see the going rates at bankrate.com) and a sink full of dishes (to keep you occupied if you're put on hold).
Sweet-talk your way out of late fees. Even the most punctual bill payer can forget to put the check in the mail. Call, apologize profusely (bonus points for particularly creative excuses) and tell your card company that the check really, truly is in the mail (make sure that it is). Then ask to have the late-payment fee waived just this once, pretty, pretty, pretty please. A little groveling will save you an average of $35. Now mark your calendar with next month's due date, because the late-fee forgiveness will only fly once, maybe twice a year.
Dial down your car insurance premiums. If your current deductible is less than four figures, call your car insurer and raise your deductible to $1,000 (at least). Upping it to that level from $250, for example, could slash your premiums by 15% or more. (That's $135 in savings if your current annual cost of car insurance is $900.)
Hang up on high cell-phone cancellation fees. Don't get stuck with a dud cell-phone plan just to avoid a steep early cancellation fee. You can dump the plan and skip the penalty termination fee ($170 on average). Start with your provider: If it has changed the terms of your contract in the past 30 days, you may have the right to terminate the deal without getting financially slapped on the wrist. If you missed the deadline or no changes were made, your next step is to hook up with a cellular exchange service (for example, celltradeusa.com) which will help you transfer your carrier (and remaining contract) to a cell-service shopper for just a small fee (typically $20).
About the author: Dayana Yochim is the consumer finance expert at the Motley Fool (fool.com) and the author of, The Motley Fool's Guide to Couples & Cash: How to Handle Money with Your Honey and co-author of The Motley Fool Personal Finance Workbook.
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Not to be hugely critical or anything, but I would not recommend changing your car insurance premiums! I'm a very, very careful driver, and last week, hit a patch of black ice on the freeway, and had an accident, which caused about $3000 in damage to the front end of our truck. Let me tell you- these things happen, and right now, my family is grateful as all get-out that our deductible is only $500- anything more, and it would break our collective back. These kinds of things can happen out of the blue, and if you're living paycheck-to-paycheck, as we are, having a sudden expense of that magnitude can literally mean the difference between being a homeowner, or being out on the street. I never thought an accident of this kind would happen to me (no tickets, no accidents, and I'm close to middle age these days), but they can, and they do. Insurance isn't so expensive that it's not worth the cost, when things like this occur.