How to Negotiate for Lower Interest Rates on Credit Cards

 

 

 

If you are convinced that you don’t need a credit card and you want to gradually pay them off so you can have them deactivated, you can be more successful if you can negotiate for lower interest rates. Interest rates can range from 4.5% to 24% when comparing interest rates among banks. The numbers can go even higher in the years to come. However, if you applied for your credit card when your credit score was less than stellar, but it has since gotten better, you might be paying a higher rate than you should be. 

Here’s how you can negotiate to lower your credit card interest rates:

Know Your Cards Before Negotiating

It would be best if you do your research before trying to negotiate. You have to keep in mind that it is important for credit card companies to retain their customers. So before you pick up that phone and try negotiating, you should first know your numbers. Check your current balances and write down all the interest you paid in the past year. This way, it would be easier to convince the credit card company to offer you a lower interest rate. It would also be excellent practice to research the other lower-interest credit cards in the market that you can use as a reference. 

Increase Your Chances

While credit card companies want to retain their customers, they would most likely choose the good ones. If your history with them is somewhat shaky, it might be best to postpone the negotiation and wait for the right moment when they would actually want you to be their customer. 

One of the best ways you can improve your odds is by paying your debts on time so you can achieve an excellent credit score of at least 740. 

Call and Ask

As soon as you’ve established your credit rating and prepared all necessary documents to back you up during the negotiation, pick up that phone and call your credit card company and ask them to lower your interest rate. Before negotiating, ask for the name of the officer. The key here is by asking in a forcefully polite manner. 

If you get a no, don’t let it stop you from asking. Sometimes, you have to talk to the right person. Call again and ask for the manager who has decision-making power. It would be wise to mention that you would leave balances if the company would reduce your interest rate, and they may be more amenable to granting your request. If after all your negotiation they still reject your application, state that you are going to pay off your balance and move on to their competitor. Mention a specific credit card company. 

Should you be successful in your request, ask them to mail you a confirmation letter. 

Move On to Better Deals

However, if your credit card company is not keen on granting your request, it might be best to take advantage of other options. Keep in mind that credit card companies compete with each other, and it might be best to go for the one that will give you a lower rate than your current credit card company. When comparing rates, make sure to check other factors such as rewards and annual fees. Better yet, you can completely dunk the idea of having a credit card. 

The Bottom Line

While it is best to have a credit card, it is advisable to reserve its use for emergency purposes or when you could get a better deal by paying with it. Other than that, it would be a wiser financial decision just to use cash when making a purchase.

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