A Step-By-Step Guide To Getting Your Credit Card Interest Rates Reduced

Have you gotten to the point where you’re paying hundreds of dollars a month in interest charges on your debts? There are times when this might not be a huge burden but there are also times when it can be. If you fall into the latter category – where your credit card interest rates have become a real burden – take heart. It’s really not that difficult to get the interest rates on your credit cards slashed or at least reduced.

Save hundreds of dollars a month

If you would like to know how much you could save by getting your credit card interest rates reduced, just sit down and make a list of your debts and the interest you paid this past month. If you are seriously in debt, the chances are this will add up to hundreds of dollars. Now, think what you could save if you were to get your interest rates reduced just by a couple of points. We’d be surprised if you couldn’t save at least $100 a month.

When this works best

It’s difficult to get a credit card company to lower your interest rate unless you’re carrying a big balance and have been having a problem making your payments. This is because if you don’t have a big balance and have been making all of your payments on time, the credit card company won’t be very motivated to help you because you are not paying it much money. For this to work, you need to have some leverage – that you’re currently paying the interest on your card and can threaten to move your debt to another account.

Another factor

The interest rate you’re currently paying is another important factor. For example, if you’re already paying around 8%, there is not much your credit card provider can do to lower the rate. So this tactic is most effective when you have a rate at 13% or above. But do remember that if you can get an interest rate reduction this will help you only if you’re carrying a balance. For example, if you have a $5000 balance and could get your interest rate reduced by just 1% that will save you $50 a year. And, of course, if you have a higher balance, you’ll save even more.

Step 1: Before you make the call

Of course, all you really need to do is flip over that credit card, make a note of the phone number you’ll find on the back and call the credit card company. However, if you do some preparation before you make that call, you will have a much better chance for success.

Step 2: Get your most recent statement

The first thing you need to have is a copy of your most recent statement. That way you’ll know your current interest rate. The statement will also have your account number as well as the phone number you will need to call. Next, put together any other credit card offers you’ve received recently. Some of these might offer 0% interest or a very low-interest balance transfer. These will likely have come in the form of “junk mail” you received recently. If you can’t find any of these offers, go online and see what’s available. Alternately, you should be able to get a quote on a personal loan from your local credit union. These offers are what you will use as leverage to get your rate reduced.

Step 3: Decide on a target rate

Another important thing you should do before you make that phone call is to have a target interest rate. You might try for 9.9% but it’s unlikely that you will be able to get a rate that low. Finally, get yourself in the right mindset. Get calm. Drink a glass of water. Then pick up the phone and call.

Step 4: Make the call

When you make the call, it’s important that you get somebody on the phone that actually has the authority to change your interest rate. You will need to navigate through the company’s menu until you get to a representative. It’s likely that the first customer service representative with whom you speak will be able to do that. As soon as you get a real live human being on the phone, ask the critical question, “Do have the power to change my interest rate?” If the answer is no, then ask to speak some to someone who does have that authority.

Step 5: Make your case

When you get someone on the phone that could lower your interest rate, you will need to make your case as succinctly and clearly as you can. For example, you might say, “Recently, I really had to stretch to make the monthly payments on your credit card and I need to somehow have the interest rate reduced. I would like to keep the balance on this card but I have another offer right here for one with a better rate. Is it possible that you could cut the interest rate on my account to, say, 9.9%?” What typically happens is that you will get an interest rate reduction but not as good a one as you had requested. But despite what you get out of the phone call, be polite. If you get any sort of rate reduction, say “thank you” and don’t get angry if you’re not immediately granted a big reduction.

Here’s a video with helpful information about getting your interest rates reduced and what to do if the customer service representative says no.

Step 6: Check out other options

You may be able to get an interest rate reduction that will make you happy. In other cases, you may not get much of a reduction at all. In this case, you do have some options.

Look for balance transfer options

If you can qualify for a lower interest credit card, you could transfer your balance to that card. Even better, if you could get a 0% interest balance transfer card then you might transfer your balance to it.

Get a loan and pay off the card

You could get a personal loan at your local credit union and use the money to pay off the credit card. If you own your own house you might be able to get a home equity loan or a home-equity line of credit. However, this is often not a good idea because you’re basically switching unsecured debt (your credit card debt) to a secured one that could put your home at risk.

Pay off the offending debt

Finally, you could focus all of your efforts on getting rid of that high-interest credit card debt as quickly as possible. You could work a second job, start a side business to generate extra money or sell some stuff.