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Wednesday, February 2, 2011

How to ask for and get a lower rate on your high-interest credit card

Credit card debt may be restructured or written off via bankruptcy
Paying high-rate credit card balances first reduces debt faster
It isn't always necessary to use a credit counseling service to negotiate a lower interest rate with a credit card company.

Very often the company will negotiate a lower interest rate with their client, especially if bills are paid on time or if one is experiencing financial difficulty.

There are several steps of ascending impact that can help an individual lower the monthly finance charges on credit cards. This article will first outlines steps credit card holders can take then illustrate additional methods for lowering interest rates.

Call the credit card company

Simply calling the company and asking for a lower interest rate may be all that is needed. Keeping the request reasonable i.e. in accordance with one's credit score, and having good reasons for asking for the reduction can be helpful in terms of obtaining a more favorable response from the credit card company. If the credit card is already charging a dramatically high-rate, the benefit of keeping a client's business may be worth a couple of percentage points or more. If the credit company declines the offer, don't worry, there are other methods that may work as well.

Send a credit negotiation letter

If asking for a reduction in interest rates doesn't work, one may send a more formal written request via a credit negotiation letter. There are many sample 'credit negotiation letters' available on the web that can be used as models and some consumer service organizations allow consumers to freely download and copy their letters for the purpose of interest and other credit negotiations.

Request to speak with a credit manager or account supervisor

If neither of the above two methods have proven effective after following up with the credit company and/or after a couple of weeks have passed another step may be taken. This next step involves contacting the company again by phone and asking for a credit manager, customer service manager or account supervisor. In a polite, yet firm voice express how the previous steps have had little reception and that one's request is not unreasonable. The customer service manager may be more willing to listen and have more influence in the interest rate reduction process.

Express interest in a different credit card company

If the customer service manager still does not accept to lower the rate, ask him or her why. They may respond with reason such as irregular payments, credit risk, market rates etc. Don't be discouraged by such banking lingo. As a client, one's power derives from one's business with the company. If the credit card wants to keep one's business, they may think twice about lowering interest rates. Informing the manager paying bills would be easier with a lower interest rate and that there are several other companies who would gladly accept a balance transfer at a lower rate in return for one's business.

Credit counseling services

Sometimes, one's credit rating may just be too low, or the negotiation method employed doesn't work, or the credit card company won't negotiate. It's not over yet, but could get a little more complicated at this point. Credit counseling services are skilled with working with credit card companies and can often obtain a lower interest rate for their clients. In some case a 0% interest rate is workable if one is experiencing financial difficulties and is trying to avoid bankruptcy. These credit counseling services are ideally researched well, offer reasonable rates and guarantees.

It is very possible to acquire a lower interest rate on one's credit card. If for some reason none of the above methods work, trying again after a 4-6 months of on time payments will help nullify the credit managers potential complaint about irregular payments and possibly make him or her more amenable to providing the lower interest rate. Acquiring a lower interest rate on one or many credit cards is possible, and is achieved on a daily basis by clients, credit negotiation companies. Utilizing the above steps may greatly empower a credit card holder in obtaining a lower interest rate.


1. http://creditfederal.com/debt-negotiation-letter.html
2. http://www.investopedia.com/articles/pf/08/negotiate-credit-card-apr.asp
3. http://www.askmrcreditcard.com/creditcardblog/negotiating-with-your-credit-card-company/

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