How To Reduce Credit Card Interest Rates
Just about anyone in the United States can tell you what a credit card is. As a matter of fact, you can probably ask an elementary school student and they will be able to tell you it’s how mommy and daddy pay for things. It is also no secret that the way credit card issuers make money from credit cards is the interest rate. The interest rate directly reflects the amount of money it will cost for consumers to borrow money using their credit card. With that said, a lower interest rate saves you money! But it seems as though the only way to get a lower interest rate is to close accounts and sign up for debt consolidation. What about the consumers that don’t have problems with debt? What about the consumers that just want a low interest rate? Well, I’ve got 2 ways for you to reduce your rate. However, for both of these, you must have a good payment history.
Interest Rate Negotiation
The first way to reduce your credit card interest rate on your own is through interest rate negotiations with your lenders. It is a common misconception that credit card lenders are huge corporations that refuse to help their customers. The reality is that just like small companies, lenders must make their customers happy or face the possibilities of a boycott and loosing everything they have become. With that said, many credit card issuers are willing to work with the customers that have practiced good borrowing practices. This includes making payments early, not paying the minimum payment and not spending more than 50% of your credit limit. If you are one of the many people that fit this classification, reducing your interest rate can be as simple as a phone call.
When you call your credit card company, the first thing you will need to do is navigate past the automated service. Once you get to speak with a live representative, simply say “I am calling because I was going through my credit card statements and noticed that this card has by far the highest interest rate. I like the card and the rewards but with my borrowing history, I don’t understand why I am paying such a high interest rate. Is there anything you can do to help?”. The customer service representative will place you on hold and either give you an answer or transfer you to the customer retention department. If transferred to the customer retention department, simply repeat the same statement. If you are given the answer “Unfortunately, you do not qualify for a lower interest rate at this time”, simply hang up the phone and follow the instructions below. However, most consumers with good borrowing history will receive an interest reduction.
Balance Transfer Credit Cards
Another way to reduce your credit card interest rate is through the use of balance transfer credit cards. Balance transfer credit cards are the product of the overwhelming amount of competition in the credit card industry. As a matter of fact, balance transfer credit cards were created as a way for banks to steal high quality customers from other banks! This competition means great savings to the consumer. Most balance transfer credit cards offer 0% introductory interest rates for anywhere from 6 to 12 months which can provide quite a bit of savings on it’s own. However, some balance transfer credit cards also offer low long term interest rates as well. If you lender isn’t willing to work with you and you have good credit, chances are you will be able to find a lender that will be willing to help!Google+