Credit Cards
October 21, 2020

Best Ways to Negotiate a Lower Interest Rate on Your Credit Card

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Simple. Thrifty. Living.

Negotiating a lower credit card interest rate can make it much easier for you to manage your debt. Even a couple of percentage points could help lower your overall debt by hundreds or thousands of dollars. Before you contact your credit card company to talk about lowering your rate, learn about these three best ways to negotiate.

Assuming that you pay your monthly credit card bill on time, your credit card company might lower your interest rate slightly if you ask. Doing this doesn’t take much effort. Just call the company, point out that you’re a reliable customer, and ask for a more competitive rate. You might get what you ask for.

Your credit card company can make a lot of money from you each month. It doesn’t want to lose your business. Unless you have a better offer from another company, though, your representative might not believe that you have any alternatives.

You can improve your negotiation strategy by getting offers from other credit cards. When you show your current company that other credit card providers will give you lower interest rates, you gain the upper hand during negotiations. Your credit card provider will likely lower your rate because it knows you can transfer your balance to a more appealing company. If you don’t get a lower rate, follow through with your threat by transferring your balance to another card.

When you got your credit card, the company determined your rate based on things like how much money you earned and what your credit score was. Some of those factors may have changed since then.

Your credit card company lower your interest rate until you show that your situation has changed, though.

Spend some time improving your credit score by:

If you can increase your credit score, then your credit card company will probably reward you with a lower interest rate.

The average American household has about $9,000 in credit card debt. The importance of getting a lower interest rate becomes obvious when you compare how much money you would need to spend each month to eliminate that $9,000 debt within two years.

If your credit card has a 20% rate, then you will need to pay $1,822.00 per month to pay off your debt within 24 months. At 18%, the monthly payment falls to $1,645.00. At 15%, you will spend $1,377 to get rid of your debt within two years.

By lowering your credit card interest rate by 5%, you save $10,680 over two years. Negotiating takes some time and effort. But a successful discussion could mean that you save thousands of dollars within a couple of years.

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