Financial Planning for Generation X & Y Women
 
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Expert Q&A Archive

08/27/2008
How do I request interest rate reduction with my credit card companies?
How do you go about approaching your credit card companies about reducing interest rates?
Bettye J. Banks:
expert info »
Examine your statement(s) for a contact number. It's on there somewhere. Ask to speak to a manager or supervisor and ALWAYS GET THE NAME of everyone you speak to. [Write down] the date and the time of the conversation, and if possible, [write down as much of the] conversation as possible so you know exactly what was said and what promises were made. DO NOT make any promises you cannot keep.

Plan your conversation. Write down what you want to say before you place the call. Explain why you wish for them to reduce your interest. You have a much better chance if you speak clearly and concisely about your request. You must remember however, that the credit card companies expect to make a profit from the interest you pay and to which you agreed when you applied
for the account. They make business projections based on anticipated revenue. You even agreed that they could change the terms without your permission. I'll bet you did not read that in the fine print when you signed up.

There is no magic wand to getting the credit grantors to work with you; this is why I generally refer troubled debtors to a Certified Consumer Credit Counselor (CCCC) at an agency affiliated with the National Foundation for Consumer Credit (NFCC). These agencies have YEARS of negotiating with creditors on behalf of troubled debtors. Indeed, they usually have agreements in place already.
Marcia Brixey:
expert info »
Call your creditors to request a lower interest rate. It's best to call early in the day in the middle of the week because there are fewer people calling. Make sure you've got a smile on your face and be polite. Your end of the conversation might go something like this:

"I'm calling to request a lower interest rate on my credit card. I receive lower interest rate offers from other companies every day. I don't really want to change companies, but it's not money wise for me to continue paying this rate. Can you offer me a similar interest rate?"

Most of the time, the customer service representative will put you on hold while they're reviewing your record. If you've been making your payments on time and you're a long-time customer you have an excellent chance of getting a lower interest rate. If the representative comes back and tells you that they're unable to offer you a lower interest rate, take it one step further. Explain that you've had a credit card with their company for xx number of years and really don't want to take your business elsewhere. Ask them, "Are you sure this is the lowest interest rate your can offer me?"

If the representative doesn't reduce the interest rate, ask to speak to a supervisor. Once the supervisor gets on the line, repeat the conversation you had with the customer service representative including how long you've been a customer and that you don't really want to take your business elsewhere, but it's not in your best interest to keep it with this company
at the higher interest rate. There are a couple of online resources that will help you find good interest rates - www.cardratings.com; www.bankrate.com and www.cardweb.com. Warmly, Marcia
Nancy Granovsky, CFP:
expert info »
One approach would be to phone your credit card provider. Tell the provider that you are a long-time customer and have a long record of prompt payment. Tell them that you have become aware that the Annual Percentage Rate on your account is higher than what other providers are charging. Ask if they are willing to reduce your APR.
Gerri Detweiler:
expert info »
The simple answer is just ask!

The best negotiating leverage you have when it comes to credit card rates is the ability to take your business elsewhere. So if you have other credit cards with available credit, you can call your current issuers and tell them you are thinking of transferring your balance if they can't lower your rates.

But what happens if your credit history is less than perfect, or you are carrying a lot of debt? It can be harder in those cases to get a better deal. (If you are not sure where you stand credit-wise, I would recommend you get your free credit report at AnnualCreditReport.com.)

If your rates are high because you are maxed out on your credit cards, then you may need to contact a reputable credit counseling agency. They may be able to get you better rates if you enroll in a Debt Management Program. It doesn't hurt to see what they can do for you. Best of luck to you!
Delores Lenzy - Jones, CPA, CIA:
expert info »
Suggest the direct approach...ask them and be honest and candid regarding your financial status.
Dorothea Bernique:
expert info »
First of all if you have been a very good customer and have been with the company for a while, this can be used to demonstrate that you are worthy of an interest rate reduction. Actually all you have to do is call and ask. If you need to produce an argument then use the items mentioned earlier. You can also threaten to close the card because you can get a better rate from someone else. Once again, if you have been an excellent customer, they don't want to see that happen and will most likely be willing to lower your rate.
 

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