Lowering your credit card rates will save you money.
You’ll pay less interest on your credit card balance each month by reducing your rates. If you carry a substantial balance on credit cards, a lower rate can help reduce your overall debt so you can pay your balance off quicker.
The first step to take when you plan to lower credit card rates is to examine your credit history. You can obtain a free copy of your credit report at sites such as AnnualCreditReport.com. Review the report closely for any errors or old, negative information you may be able to have removed.
If you have any outstanding debts you neglected to pay off in the past, pay them off as quickly as possible. Request inaccurate or outdated, negative information be removed.
It’s possible your credit score has improved significantly since when you applied for the credit cards you still carry. If so, it’s likely you can obtain a lower interest rate. If your credit score is higher than 750, you shouldn’t pay more than 10% interest on any credit card.
Even if your credit hasn’t improved or has potentially worsened over time, you can still ask for a reduction in interest that will make paying off credit card debt more manageable.
Once your credit report is as good as you can get it, make a list of all your credit cards. List the date you first took out the card, your balance and your interest rates. Determine how good or bad of a customer you have been over the time you’ve had your card in terms of usage and payment history. This information will help when you’re ready to negotiate with your credit card companies.
Next, determine what average interest rates are today. BankRate.com has current information on today’s average interest rates for various types of credit cards. This will give you an idea as to what rates you might reasonably expect to receive.
Finally, plan what you will say when you call each credit card company to request a lower rate. You can research scripts online, or make up your own. The following is one script that was proven effect in research done by CBS News in an experiment on lowering interest rates: “I think I’ve been a good customer. I’d like to stay with you, but I really want you to lower the rate on my card. Can you help me?”
The first person you speak with is likely to be a customer service representative who may not have the authority to lower interest rates. If you’re told your rates can’t be lowered, ask to speak to a supervisor.
If you speak with a supervisor, start your script again and clearly state you believe you should obtain a rate reduction based on research on current card rates. Discuss how long you’ve been a customer, or how good a customer you’ve been if appropriate. Be polite, calm and firm in your request and throughout the discussion.
If you’re unable to obtain a rate reduction from a supervisor, mention that you’re ready to switch to a lower interest rate credit card and transfer your balance. Unless your credit history is very poor, it’s likely you can find a better rate on a different card if you haven’t already done so.
It’s likely you’ll receive a reduction if you follow these steps, but if not, you have two options. Call back again in a month and try again, or switch to a different credit card company that’s willing to give you a lower rate. Today it is very easy to transfer balances from one credit card to another, and any interest reduction at all will save you money if you carry a credit card balance.
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