How To Negotiate Your Credit Card Interest Rates

If you’re laboring under a big load of debt of, say, $10,000 or more you might be able to get it lowered by negotiating reductions in your credit card interest rates. While this may come under the department of “if it’s too good to be true,” it’s actually possible.

There’s a website for that

Negotiate my rate is an interactive tool that can help you do just this. When you arrive a the site you will see a list of the largest credit card companies and the average reduction percentage that customers have been able to negotiate with them.

You need to have been a good customer

There are some caveats associated with negotiating a better credit card interest rate. First, you need to have been a good customer with a history of at least six months worth of on-time payments. You must be going through a financial hardship and unable to make your payments. And you need to have an offer for a credit card with a lower interest rate but you don’t have enough money to pay the balance transfer fee.

How to use the website

If you want to give negotiate my rate a try you will need to first find the bank that holds your credit card and your current balance. Type in your balance owed and a box titled “potential savings” will automatically fill in the amount you could likely save.

Two examples

I saw two examples of how this might work. The first was for a Citibank card where the average interest reduction was 5.4%. In the case of a of a $4,500 balance this would save the cardholder $1,346. The second example was an American Express card with a $1200 balance and an average reduction of 2.5%. This would save the cardholder $166.

The bigger the balance, the better the savings

As you can see from these two examples, the bigger the balance you have the more money you will save – assuming you can negotiate an interest rate reduction.

How it could help

Negotiate my rate has useful guides that can help you negotiate with your credit card providers. To get this information first click on the tab labeled What to Know. This is a sort of cheat sheet that will tell you what you need to know about negotiating a rate reduction. For example, it will suggest you gather up some alternatives or credit cards that have lower APR rate offers. It will also advise you to have your payment history ready and, if possible, your credit report. There is also a tab labeled What to Ask. Choose this tab and you’ll learn what questions to ask when you call the credit card company such as “do you have the authority to lower my rate, what would I need to do to get a lower rate and do you have some sort of promotional rate I might qualify for?

Be respectful

The site also suggests that you be respectful and not act like a jerk. Don’t be rude even if you’re not getting the interest rate reduction you had hoped for. The person on the other end of that telephone line wants to be helpful but if he or she can’t lower your interest rate substantially, don’t take it out on them. They’re just doing what they’ve been told to do.

The other important benefit

As you have seen, negotiating a reduction in your interest rate could save you a fair amount of money. This leads another important benefit. The less money you have to pay back, the faster you should be able to pay it off. Go back to that example where you could save $1,346 on a $4,500 balance. That would leave a balance of just $3,154 that you should be able to pay back a lot faster than the $4,500.