Can I Negotiate a Lower Interest Rate on My Credit Card?

David Miller
David Miller

The best credit card makes purchases easier with a decent credit limit at your disposal. Besides that, they also help you earn rewards and improve your credit score. However, you need to pay the credit bill along with the interest rate if you do not pay it in full each month. If you have made a big-ticket purchase using your credit card and now you are worried about your credit card interest rates, you must know that it is not a number carved in stone. Credit cards have variable interest rates, which may fluctuate based on various factors, including the card company’s discretion. That means you may call your credit card issuer and negotiate a lower interest rate on your card.

Although a reduced interest rate is not guaranteed, you stand a better chance if you have a positive payment history and a strong credit score. Sharing information about your financial difficulties and circumstances like unemployment can also strengthen your case. Are you planning to negotiate your interest rate with your credit card issuer effectively? Here’s a guide that can help you achieve success.

Steps to Follow

Reducing your credit card interest rates can minimize the interest amount you pay every month, thereby saving big and reducing your financial burden to a great extent. While contacting your credit card issuer for a reduced interest rate, these are the steps you must follow:

  • Calculate What You Can Pay:

Create a budget and calculate how much you can spend on debt payments and other financial obligations. Ideally, keep 50% of your income for needs, 30% for wants, and 20% for debt payments and savings. Once you figure out how much you can put for your credit card bills, you can calculate how much reduction you need in your interest rate to make payments affordable.

  • Call Your Credit Card Issuer:

Reach out to your credit card issuer over the phone, chat, or email and request a reduction in your interest rate. Be honest and tell the issuer that you are not able to make your payments due to financial struggle, and you may default if they do not reduce the interest rate. The company will more likely grant your request if you have a long-term relationship with them with a good track record. Since defaulting customers are expensive for the banks, they will be willing to accept your request.

  • Keep Trying:

Negotiating lower interest rates may take more than one email or phone call. Sometimes, the supervisor may also want to talk to you. If you do not get any response on your first call, call back in a couple of days or use another method of communication. If they agree to reduce your interest rate, thank them and request a written confirmation.

Tips for Success

While negotiating, here are a few tips that can improve your chances:

  • Give a Legitimate Reason:

Creditors would want a legitimate reason to lower your credit card interest rates.

  • Don’t Lie:

The customer service representative can easily see your credit card history while talking to you over the phone. So, never lie or try to bend the truth. Stay honest while negotiating a lower interest rate.

  • Speak to the Supervisor:

The supervisor has more authority to negotiate your interest rate than the customer service representatives. So, if they deny your request for the first time, ask them to connect you to the supervisor to state your case.

  • Don’t be Rude:

Maintain a composed demeanour while talking to the representative. Speak respectfully to impress them rather than annoy them.

  • Know Your Limits:

Credit card companies set interest rates based on your credit history and several other factors. If you are not eligible, you cannot get a quick fix. Build up credit and improve your financial position before making another request. Before getting a credit card, compare interest rates offered by different credit card issuers and apply for the best credit card with the lowest interest rate. However, if you face challenges paying your credit card bills in full, requesting a reduction in your credit card interest rates can help you manage your finances better. Still, if your current issuer is not ready to negotiate, you may consider other options like balance transfer and debt consolidation.

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