Do you think that you can get lower credit card interest rates? Of course you can! All you have to do is ask. It is not against the law to request for a lower credit card rate. However, you also have to understand that you cannot force your creditor to lower it if they do not want to.
Truth be told, lesser consumers should have no problems with their credit cards if only the rates were not too high. Of all the other debt types, this is the debt with the highest rates. According to the latest data from Bankrate.com, the average interest rate for credit cards is at 15.66%. It is more than half of the next highest loan rate – which is for student loans at 6.8%. Mortgage loans has an average of 4.24%, home equity has 4.38% and auto loans has an average of 3.22%.
Imagine how much money you are wasting on your credit card rate. If you owe $10,000, there is a chance that you will be charged $1,566 on that debt. Seems unfair right? Some card even have an interest of 36%. You should seriously consider than every time you swipe your card. It is no joke to waste that much money on purchases that you can pay in cash.
Important things to know about the interest on your cards
According to the credit card rate report from CreditCards.com, the lowest interest rate that are offered averages at 10.37%. That is still a high rate compared to other types of debt. The rate will also vary depending on what type of card you have: balance transfer (12.73%), business cards (12.80%), student cards (13.27%), rewards card (15.04%) and airline cards (15.46%). If you have a bad credit score, it gets worse because the average credit card interest that you will get is 22.73%.
To make things worse, the law allows creditors to raise their interest rates for no reason at all. They are only required by the law to give all consumers that will be affected at least 45 days notice before the implementation of the new rates. According to ConsumerFinance.gov, the significant changes that creditors are allowed to make includes the interest rate, minimum amount requirement, grace period and even their method in computing the charges on your card.
The website states that although these are allowed, there are certain limitations to what creditors can change. Like they cannot change the interest on an existing balance unless you are 60 days past your due. But if you already solved that problem, you can request them to lower your rate and they should comply.
Other than that, they have no legal obligation to agree to lower your rate just because you asked them to. But that does not mean you should not try at all.
5 reasons to give creditors for a lower interest rate on your card
A lot of consumers have called their creditors to ask for a lower rate on their credit card. Your creditors are not heartless and if you explain the situation to them, they might agree to lower your interest rate. Sometimes, you don’t even have to be in a bad financial situation. As long as you know how to negotiate your case properly, you should have a fighting chance to succeed in lowering your credit card rate.
Here are 5 arguments that you can give to help convince your credit card issuer that you deserve a lower interest rate.
You have a good credit history. One of the strong arguments that you can make is that you have been a good credit card holder. If you have been paying your dues on time and you do not miss any payments, you can use this reasoning. Let your creditors know that you are a responsible credit manager and that they do not have to protect themselves by giving you a high interest rate.
You have a long credit history. If you have had that card for several years, you can also use that to help convince your creditor to lower your card rate. The credit card company still views you as their customer. The prospect of losing old clients will make them more amenable to agree to your proposal.
You are thinking of transferring your balance. This is applicable to those who are struggling with a lot of debts. Using balance transfer to solve credit card problems is one of the ways you can convince your creditors to lower your rate. If you have found a card that offers a lower interest if you open with them, then this is something that you can bring up with your existing creditor. Let them know that you are having a hard time paying off your debts because of the high interest rate and that you have received a lower offer from another bank. Ask them if they can match the offer of other bank so you do not have to transfer your balance.
You are torn between loyalty and practicality. This uses the same scenario as above. However, you will play on your loyalty towards the card. This will work if you have been with the company for a couple of years. Let them know that you received a good offer from another bank about a lower credit card rate than your existing. Tell your creditor that the offer is appealing but you would like to know if they can match it first because you would rather stay with your old creditor instead of transferring to a new one.
You just make an offer. Sometimes, you do not have to make any excuses. Just make an offer and let them know that you think your rate is too high and that you believe you deserve a better credit card rate.
What to do if your creditor refuses to lower the rate of your credit card
While all the above mentioned arguments are sound, not all creditors will agree to lower your rate. If that happens, you have a couple of options before you.
- Wait a few months and try again. If they did not agree the first time, let it go and wait a couple of months before you try again. See if you get better luck at negotiating a lower rate.
- Do not add to the balance and slowly pay it off. In most cases, any high interest rate that was just implemented only applies to new purchases. If this is the case, then just do not make any purchase for the meantime and pay off what you owe. When you have paid it off, you can call the creditor again to ask for a lower interest rate. If they refuse, then you can do the next option.
- Transfer to a new credit card. When the credit card issuer refuse to lower your credit card rate, you can tell them that you will just transfer to another creditor who offered you a lower interest rate. Since you do not any balance with the old card, this should be easy to do.
- Get debt help. If you cannot transfer to a new card and your high interest rate is really troubling you, then you may want to think about debt relief. Some people deal with credit card interest rate that is too high through debt relief. Call a credit counselor and ask them for your options to pay off your credit card debt. There are non profit credit counseling agencies that you can go to for help. They should be able to help you with a payment plan that you can afford. In some cases, they can even help you negotiate for a lower interest rate.
Do not think that you have no power to change your credit card rate in case it gets too high. Even if your creditor refuses to agree to your proposal, you have the option to transfer to another credit can company with better rates and terms.