7 Tips To Lower Credit Card Interest Rate
Most credit cardholders may not know this but you can get the credit card issuer, to give you interest and fees concessions. Also, if you have the right information, under certain conditions, and if you approach your credit card issuer you may get them to lower your interest rates, fees, and sometimes their balances. You also should note that according to the law, card issuers are under no obligation to lower their interest rates.
So to get a lower interest rate depends on how you approach them. Therefore, to give you the methods to use, here are some tips on how to lower credit card interest rates.
How To Lower Credit Card Interest Rate
1. If You Are Negotiating Over Debt, Stress The Temporary Nature Of Your Need
Even when you are in dire need temporarily, you can persuade your card issuers to reduce finance charges by asking for a hardship plan. You could explain that you want the card issuers to help you within a specific number of months. Also, state the exact number of months you want relief. In most cases, the card issuer will give you some relief ( i.e. a short term account alteration) even if it is not up to the number of months you want.
2. Suggest A Sensible Debt Settlement
Suggesting an amicable debt settlement is one of the tips on how to lower credit card interest rates. You can arrive at a deal on the amount of debt you owe a credit card issuer. Before you start a negotiation of debt settlement, make sure you have some funds. So offer that amount to the card issuer. If you have a good case you can haggle with the card issuer. To make sure the issuer agrees to a settlement, point to the accumulated fees you have paid in the past.
3. Appeal To The Powerful
Know who to speak to when you want to make an appeal for a reduction of credit card interest rate. When you call the card Issuer customer service representative, they can lower an interest rate or waive a late fee. But if you have other complicated problems like payment suspensions, and balance reductions, ask to speak to the manager of the credit division.
In addition, call the toll free number on the back of your card and politely ask to speak to the manager. But if that agent refuses to transfer your call to the manager, visit the website and look for the customer’s service executive and send an email to that person. Tell the person your experience with their customer services and what you want.
In most cases, you may get what you want if you go straight to the top.
4. Know Your Card Tricks
Knowing how the card works and the fees is another tip on how to lower the credit card interest rates. So contact your card issuer and tell them you are keeping your account, credit line, numbers and, accumulated points. But that you want them to remove the annual fee. This depends on the card issuers.
In some cases, you may be able to switch to a simpler product and still keep the rewards that you had accumulated. Also, if you switch to a card that does not have annual fees, you will save some money. Approach your card issuer. It is an easy process and you may just get what you ask for.
5. Bring Up Balance Transfer Offers
If you can find a 0 percent balance transfer card, to move your debt from a high-interest card for a year or more than one year, use that to bargain when you are negotiating for lowering of interest. Tell the issuer you want a balance transfer and want to close the present card account.
Also, tell them you would prefer to work with them than move to another card issuer. And make sure you know what their primary competitors offer. If you do, it will be easier to get a better deal from them especially when they know that their competitor is offering to give you a better deal.
However, it is usually better to stay with the present card issuer due to a transfer fee of 3 percent in case you move. So, convince them that they need to lower the interest rate on your card and the fees too.
6. Discuss A Credit Counseling Agency’s Plan
If you discuss with a credit counselling agency, you could use it as leverage to ask for a lower interest. That is another method on how to lower credit card interest rates. Most credit card issuers will lower interest rates and some would drop interest completely for credit counselling clients.
Also, they may eliminate late and over-limit fees for people who are having a debt repayment plan. To learn all about credit counselling and what you can get, arrange to meet an official credit counselling agency for a free budget and debt appointment.
After meeting with the credit counselling agency, meet your credit card issuer with the information you have. Also, ask the card issuer if they can match or give you a rate that is up to what you will get if you signed up with a credit counselling agency.
If the credit card issuer rejects your request for a lower interest rate and you are qualified for the credit counselling agency’s plan, you can accept that plan. Note that the downside of this plan is the administrative fee of $25 per month. Besides, you must agree not to take new credits and to close your former credit account.
7. Make Yourself Hard To Resist
Like all other business organizations, credit card issuers would also want to give their best customers some form of reward. If you want to lower your interest rate then you must prove to the card issuer that it is worth something for them.
If you have unpaid debts then you need to pay your bills early for at least a year. Then make sure you repay more than the agreed amounts to the card issuer. Also, when you have paid off your credit substantially, you will become more attractive to the card issuer.
They may also want to keep you happy and give you lower interest on the outstanding balance of the debt you are yet to pay. At this point, you may ask for lower interest concessions and after you have improved your credit score, you can move to another credit card issuer with a better offer.