Wednesday, March 17, 1999

Dear NationsBank

by Chris Rugaber

Dear NationsBank,

Thank you for the letter you sent me yesterday, which pointed out that "interest rates have reached unprecedented lows." I appreciate the fact that you want me to take "full advantage" of this regarding my mortgage. How thoughtful of you. It's true that many people should refinance their homes at these low rates and save lots of money in the process. Of course, they probably shouldn't take out all the loans you are also trying to push on them. I hope most of your customers will have other ways to finance their children's education, such as their savings, rather than the Equity CreditLine you're now offering.

Anyway, I would rather discuss the fact that "interest rates have reached unprecedented lows" in the context of my credit card, which like my mortgage and checking account, is also through NationsBank. Currently I'm still paying 14.4% interest on my unpaid balances, which of course I should never have if I was always Foolish. But occasionally I am weak and Wise. In fact, I would still be paying 17.8% if it wasn't for the fact that I called your credit card bureau a few months ago and requested and received a reduced rate. However, given that interest rates have "reached unprecedented lows," it only makes sense that I would now pay even less than 14.4%, don't you agree?

Of course, I wouldn't have even thought to call and request a reduced rate if Tom and David Gardner hadn't suggested it in their book, You Have More Than You Think. I used to read plenty of personal finance magazines and never came across such a suggestion before. For some reason, I have always gone merrily along, assuming that credit card interest rates were some fixed law of nature. Instead, when I called to request a reduced rate, it was actually quite easy -- you do have some courteous employees. So even though I'm not the type that enjoys the whole confrontational, haggling thing, it wasn't hard at all to get my rate reduced. Of course it really shouldn't have been, considering that I have had this same credit card through NationsBank for over ten years! Why would anyone need more than one anyway?

Let's avoid a messy divorce. "Interest rates have reached unprecedented lows," so stop suffocating me with the high rates on my credit card. I need room to breathe! I'll call and request an even lower rate -- let's knock that baby down to 12% or so.

And finally, let me apologize in advance, for I will be encouraging other people to also call their credit card companies and request reduced interest rates. After all, these rates ought to be subjected to the same pricing pressure that other products are. There's no fixed law of nature about them.

Fool on,

Chris Rugaber

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