How to Lower Interest Rates
From LoveToKnow Creditcards
Knowing how to lower interest rates on your credit cards can save you a bundle each year. If you think you have to settle for high interest rates, read on to find out how to change that!
Credit Card Interest Rates
Not all credit card companies have the same interest rate and not all customers of a credit card company have the same interest rate. The higher your interest rate, the more you will be charged each month in finance charges. Obviously, you want the lowest rate possible. If you are currently paying high interest rates on your credit cards, how can you get a lower rate?
Know How to Lower Interest Rates
Many people mistakenly believe that they have to accept the interest rate that they are currently paying on their credit cards. Did you know that anyone can request a lower interest rate? Here are a few tips and guidelines you should be aware of before you call up your credit card’s customer service department.
Credit Score
Your credit score plays a very important part in the decisions made by credit granting individuals. Credit worthiness is a key deciding factor for whether your interest rate can be reduced or your credit limit increased. The higher your credit score, the better your chances of having your interest rate reduced.
Payment History
Payment histories are very important when people are reviewing your account to make credit decisions. Do you pay your account on time each month, or do you pay a little late or less than the minimum due? People who have excellent payment histories usually get the nod to have their interest rates lowered.
Payment Plan
A credit card company may be willing to lower your interest rate if you agree to an automated payment plan from your checking account. If you agree, you will still receive a monthly credit card statement, however, the minimum balance shown on the statement will be automatically deducted from your checking account on the payment due date. If you decide to pay more than the minimum balance one month, you just send the payment by check in the envelope provided with your monthly statement. If you have a history of late payments, agreeing to be put on an auto payment plan may be just what the credit card company needs to hear to decide to give you a lower interest rate.
Card Features
If a credit card company offers cards with different features, the interest rates on each of those cards might be different. Usually the more features available on a credit card, the higher the interest rate. For example, rebate cards or cards earning points to exchange for gifts will usually have higher fees than non-rebate cards. If you have not been successful lowering the interest rate on the card you have now, ask your credit card's customer service departments if they have a different card with a lower rate of interest. They will usually be very willing to cancel your current account, issue you a new credit card for the new account and move your balances over to the new card.
New Accounts
Perhaps you have just opened a new account with a credit card company, but you’ve just seen some new ads on television touting a lower interest rate with that same company. In this case, the credit card company already knows your credit score; your payment history with them has no bearing if you haven’t made a payment yet. Call the customer service department and tell them about the ad you’ve seen offering a lower interest rate. Ask them to give you that same rate. If they waffle, tell them you are considering closing your new account or ask to speak to a supervisor. Odds are they will see things your way and give you the lower interest rate.
Get the Best Rate
It never hurts to check out various credit card companies to see if you are getting the best offer possible. People that have a good to excellent credit history shouldn’t pay more than a 15 percent interest rate.
If you do have a poor credit history, you should still shop around for lower interest rate credit cards. Avoid credit cards with a 20 to 25 percent interest rate since the finance charges on your balance will be high each month. Instead, work on improving your credit by paying off your existing balances and making on time payments with your utility, rental or mortgage companies. Once your credit score improves, you can use your know-how to lower interest rates and get the best offer possible..
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Comments
Calvin, contact your credit card company and request a lower interest rate. Good luck!
-- Contributed by: Tamsen Butlertrying to reduce interest rate.
-- Contributed by: calvin parhamJeanne,
What you can, and cannot do, while you are working with a debt reduction company depends largely on your contract agreement with that company. The company should be calling your card issuers and trying to get lower rates as well as reduced finance charges. If they are not, I would ask them why not. If they are not trying to get your rate reduced, then I would question whether you are getting the full value of your relationship with the debt reduction company.
Your credit card companies may be very willing to reduce your rate, even though they said no to you several years ago when you requested rate reductions. They will review current situations, both yours (particularly your credit score) and the current rate policies of the card issuer.
Thank you for your question and for visiting LoveToKnow Credit Cards.
-- Contributed by: SusanWeber
This page has been accessed 2,405 times. This page was last modified 03:24, 31 January 2008.
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