I have been asked to review a portion of David Bach’s new book Debt Free For Life. In particular, I had a chance to read Chapter 7, Negotiate Your Debt down: How to Lower the Interest Rates on Your Credit Cards. And I’ll be reviewing Chapter 8 later today.
About David Bach
Bach is one of the most widely published personal finance authors in the United States. He boasts more than 7 million books in print with titles such as the Automatic Millionaire and Start Late, Finish Rich. His work has been described as a combination of personal finance advice mixed with motivation. His latest offering does not stray far from from this proven formula.
Bach’s Advice On Lowering Your Credit Card Debt
Presenting me with advice on reducing my credit card debt may seem about as useful as giving me tips on childbirth. I have never had credit card debt in my life and I never will. Perhaps a better analogy would be to compare me to an obstetrician; while I will not ever experience first hand how it feels to be burdened with credit card debt, as a consumer advocate, I have a role in helping others to overcome their debts.
It Can’t Hurt To Ask
This chapter boils down to two points, both of which I found valid. The first is the old adage that it never hurts to ask. This is something that I have advised people to do on many occasions. In this case, Bach implores cardholders to simply ask for a lower rate. He presents strategies for escalating your requests to supervisors who are empowered to grant them. He also provides helpful logic to convince banks that they should reduce your APR. Intertwined with these strategies are side notes with personal stories from actual cardholders. This lends credibility to his advice while demonstrating that you do not have to be a best selling personal finance writer to convince a bank to lower your interest rate.
Get With The Program
His second point in this chapter is that cardholders can invoke little known programs that banks offer to distressed customers. These programs are called “forbearance” and “debt management plans”. I will admit that I had not been aware of these plans. Like the semi-secret discount programs that pharmaceutical companies have for customers having difficulty paying for their medications, these two programs can offer some relief from the high interest rates indebted cardholders may be paying. To qualify, you have to prove a hardship of some sort. My biggest fault with his explanation of these programs is that if he has done the research to determine what the banks consider to be hardship, he does not share it with his readers. Knowing specifically what circumstances are included would be extremely useful to anyone trying to qualify for such a plan.
Bach presents his strategies for living debt free like the veteran personal finance writer he is. In the chapter I was asked to review, he offers advice that I found both obvious and novel. Even the obvious strategies are explained in such a manner that, as a personal finance writer myself, I was still able to learn some new tactics for dealing with credit card agencies. If you or someone you know is struggling to get out of debt, and paying inflated interest rates on your credit cards, Bach offers some practical advice and encouragement to get banks to lower your rates.