Posted on
November 18, 2008
at
12:03 pm
The average annual percentage rate on American credit cards is about 18%. Convincing your credit card company to lower your rates will not only reduce your interest payments each month, but will reduce your overall debt. Lowering your credit card rates is possible even if you have little confidence as a negotiator. You'll simply need to do some research and make a few phone calls. It is important to understand some of the key factors influencing the credit card interest rate for you to better negotiate your credit card rates. These key factors are:
- The risk of default that you pose to the financial institution. The higher the risk the higher the credit card interest rate. Understand that by lowering the perceived credit risk to the credit card company will reduce your credit card interest rate.
- Competitive Market place – The average credit card interest rate for your profile is driven by the credit card industry market place itself. Hence if the market is squeezed on cash flow then credit maybe hard to find and hence the rates may increase and if the credit market has a lot of available cash to lend then the average rates will decrease.
Getting your credit card interest rate lowered depends on various factors. They are more willing to say "yes" if you meet most or all of the following conditions: - You have a good credit rating -- meaning no late pay notations on your credit report and a good credit score;
- You do not have a high debt-to-income ratio and you do not carry a big balance on your credit card;
- You do not send in just the minimum payment required each month;
- You have an excellent payment record with that particular creditor;
- The credit card is not one that is categorized as "sub-prime", meaning it is not a secured credit card or one marketed exclusively to those with bad credit.
So, before getting started, you want to research, do your homework and find out what rates are being offered at this time by other major creditors. Then, call your creditors...and negotiate a better rate.
Posted on
December 2, 2008
at
9:00 am
I agree with you. I was able to reduce my interest rate on my credit cards. Specialy in todays economy when a lot of people are not able to pay their credit card bill, creditors will take any thing they can get.
Posted on
December 2, 2008
at
10:34 am
lenabena802 makes a good point. Lowering your interest rate is just wise money management especially if you are caught in the "can't pay the full balance" cycle. I hear it from more and more people so I have to believe it is for real. It is nothing to be ashamed of and you shouldn't heap any unnecessary guilt on yourself if you've paying the balance in full. Stuff happens and with the right attitude and money management program you can turn your situation around.
Posted on
December 2, 2008
at
11:58 am
I called my credit card company about my interest rate, and decided to cancel it. I have farely reasonable credit (but alot of student loan/car payment debt) and what I was requesting wasn't an outrageous reduction... but they wouldn't work with me. My credit was good enough to get a Capital One credit card, which has a transfer balance option on it. I gladly payed the $50 transaction fee and move $6k of debt from a 18.99% card to a 0% for the first 6 months and $13.99% afterwards card. Capital One won a fan that day...
