Here in Fooldom, we've got plenty to say about credit cards and debt:

  • Don't charge more than you can afford.
  • Don't think you're alone if you're saddled with big debt.
  • Don't think you can't dig yourself out from under it. You can.
  • Pay off your highest-interest-rate debt first, in most cases.
  • Try to negotiate lower rates by calling your card companies.

These maxims are all well and good, but it can sometimes be hard to really believe and accept them. In such cases, it can be great to hear about some firsthand experiences. So please permit me to introduce you to Fool Community member fenway78, who recently shared her story on our Credit Cards and Consumer Debt board. She said:

My Capital One Financial (NYSE:COF) [credit card] interest rate has been creeping its way up to 19.15%, so I just called and asked if I could have them lower my rate. The first gal I talked to said she would transfer me to the appropriate department but wanted to give me a heads up to be sure and ask for a "fixed" lower rate since my rate was currently variable based on prime, which of course is definitely increasing.

I was then transferred to an account manager who said that based on my longevity with the company (one year, by the way) and my "excellent payment history", he would be happy to lower my rate. Instead of the fixed rate, however, he recommended the variable based LIBOR (London InterBank Offer Rate) which actually went down in the last cycle. Anyway, I now have 14.9% fixed for the next two cycles and then it converts to that variable rate. He also told me to just keep calling back every couple of months or so, and as long as I continue paying on time, there should be no problem in continuing to lower my rate.

She ended by saying, "For anyone who hasn't made the phone call yet to ask for a lower rate, DO IT NOW! It doesn't hurt to ask!" That's very true.

Why is it true? Well, as shirehobbit responded, "This means more of your hard earned money will be going toward the principle and you'll be able to pay off this account faster." (For some inspiration, know that shirehobbit has reduced his debt from $44,000 to less than $14,000 in just more than a year.)

fenway78 then returned, to add:

Between my husband and me, we're working on paying off nine (ugh!) cards. After I told him about what I had just accomplished, I suggested he call [about] his Capital One card, and wouldn't you know it, they did the same thing for him! (Lowered the rate from 18.8% to 14.9%).

You don't have to be gouged
If you're paying an unreasonable interest rate on your debt, take a few minutes to make a simple phone call or two -- it can be well worth it.

Let's run some numbers, to see just how worth it it can get. Below are some interest rates that a Fool Community member recently shared. Note that some of these card issuers are charging some borrowers even more:

Card issuer

Cited interest rate*

JPMorgan Chase (NYSE:JPM)

29.99%

Citigroup (NYSE:C)

32.24%

Morgan Stanley's Discover

28.24%

Capitol One Financial

17.00%

Wal-Mart's Sam's Club

23.15%

Target

28.00%

Kohl's

21.9%

* As reported by Fool Community members.

If you owe $25,000 on credit cards and have an interest rate of 20%, you'll be forking over a whopping $5,000 per year. Get that rate down to 15%, and your interest bill sinks to $3,750, saving you $1,250. Get it down to 10%, and you'll save $2,500. Not bad for a little telephone work, eh?

Keep more of your money
Learn much more about the surprisingly interesting credit card industry in our Credit Center, which also features tips on getting out of debt, along with guidance on how to manage your credit effectively.

There's some great stuff in our Credit Center, and it's all free reading. (We even offer spiffy Motley Fool credit cards, some of which offer cash back or rewards -- I've got $106 coming back to me on my Fool card.)

The following articles can help you:

JPMorgan Chase is a Motley Fool Income Investor pick, while Wal-Mart is a Motley Fool Inside Value selection. Try any of our Foolish newsletters, each packed with powerful investing strategies and tips, free for 30 days.

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. The Motley Fool has a full disclosure policy.