Magazine article Newsweek

Money Notes: Focus on Your Money: Mortgage Brokers, Cheaper Phone Cards, Auto Bargains, and Cheap Long-Distance Talk

Magazine article Newsweek

Money Notes: Focus on Your Money: Mortgage Brokers, Cheaper Phone Cards, Auto Bargains, and Cheap Long-Distance Talk

Article excerpt

STRATEGY

A Cheaper Credit Card Is a Phone Call Away

Pretty please, with sugar on top? Ask your credit-card company nicely, and it's likely to cut your interest rate. Customers who tried recently said it worked more often than not. They saw their rates reduced from an average of 16 percent to 10.47 percent just by phoning their card companies, according to a new survey by the Public Interest Research Group. Card issuers can afford to be generous. They've held rates high despite the Federal Reserve's 11 straight cuts, and aggressively raised late fees all the way to $35 in the past month. Spreads between cheap and costly cards have widened: rates are a rock-bottom 4.75 percent on Wachovia's Prime for Life card and as high as 35 percent for some cards aimed at poor credit risks. If your issuer won't make nice on the phone, shop around. Linda Stern

HOMES Can You Trust Your Mortgage Broker? Add another worry to buying a home: should you trust your mortgage broker? About two thirds of home loans are arranged by brokers who help buyers shop around. Buyers are responsible for the broker's fee, but few people know brokers also receive payments from lenders for steering customers into loans that have jacked-up rates.

Everyone's vulnerable--people seeking jumbo mortgages, people with poor credit, even the savviest shopper. A recent study by Harvard law professor Howell Jackson found that 90 percent of customers using brokers agreed to loans with higher than normal rates, typically by a quarter to half a point. …

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