Interest on credit cards can really cost you a lot of money! If you have a $5,000 balance on a credit card with a 24% interest rate and your monthly payment is $150, it will take you 56 months to pay it off and you will end up paying an additional $3,321.72 in interest! Now, if you are able to reduce that interest rate, not only will you pay it off sooner, you will also save a ton in interest. For example, with a $5,000 and a 16% interest rate, you will pay off the loan in 45 months, and will have paid $1,656.59 in interest. It’s still a lot in interest, but it cuts the amount of interest you pay in half! So here are a few tips to help you talk to your credit card company and convince them to lower your interest rate.
- The odds of success are in your favor. Studies show that 2/3 of people who request a lower interest rate are approved! Keep in mind that’s still not everyone, so there’s no guarantee, but you have a good chance of being approved, especially if you have a good history with the company.
- Collect samples of other offers. Credit card companies want your business. Let them know about other offers you are getting, but that you would prefer to stay with them if possible. Then ask if there’s anything they can do for you.
- Improve your credit score. Paying down your other card balances and making every payment on time will help improve your credit score. The better your credit score, the more likely the company will be to lower your rate.
- Make your case…nicely. Politely ask to speak with a manager when you are ready to request a lower interest rate. If they are not willing to work with you, politely let them know that you will no longer use the card and see if they will make you an offer. If not, don’t fly off the handle and get angry. Thank them for their time and hang up.