Some tips on negotiating a lower interest rate

Ever been in debt? If you have, and you’ve tried to get by by means of only paying the minimum payment, you may notice that it takes awhile. Why? A big part of this is how high your interest rate is. Most standard credit cards have an interest rate of at least 15%, so on a $1,000 debt, half or more of your minimum payment could be interest.

Did you know that there are ways to negotiate a lower interest rate on your credit cards? Honestly, it just takes a phone call and a conversation with the right tone in order to do so. Here are some hints.

  1. Don’t even try if your payments are erratic. A bad pay history means that your importance as a customer isn’t as high as it could be. You’re a bit of a threat, so to “reward” your mistakes with a lower interest rate is out of the question.
  2. Be polite. Threats like “I’m gonna leave if you don’t give me a lower rate!” aren’t going to help your situation any. If you are polite and mention that you’ve been offered a lower rate with another company, they’re more likely to cater to your inquiry.
  3. Talk to them about transferring other balances. If you talk to them about other cards and that you’re considering consolidating them, your creditor may be more likely to give you a lower rate so that their company is the one you consolidate to.
  4. Always double check if it’s introductory or fixed. This is incredibly important, especially when transferring balances. A lot of times, your card company will give you an introductory rate for those transfers, and then it’ll go up to a normal fixed rate after a set period of time has passed. Try to see if they will give you a lower fixed rate, even at the cost of losing the lower introductory rate. Having 7% interest throughout the duration of paying off your card is better than paying 5% interest for 6 months then having to pay 15% after that.
  5. Have a backup plan. Some creditors just won’t budge. If this is the case, make sure you do have a backup plan to transfer your balance to another company. Even though your current creditor may not have budged for you, losing your business (especially if you were a good and/or long time customer) may give them a message so that other people can negotiate lower rates.

Consolidating your debt and trying to fight for lower interest is totally worth it. If you stay polite while not allowing yourself to be walked all over, you should be able to slowly get away from a painful life of debt management more quickly.

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