Lower Credit Card Interest: How to Lower Your Credit Card Interest Rate

Credit Card Interest Rate

Here are few five easy tips and steps on how to reduce APR of your credit card.

You know what too much birthday cake can do to your young child right? that is what a high-interest rate can do to your credit card debt as well.

It feels good at the beginning and gradually goes out of control leaving you hopeless and helpless at the later time.

I have good news for you, and that is that the high interest on credit card is not going to last forever. Though is requires some good amount of work, but with perseverance and discipline to take whatever that come out of it, you will stand a very good chance that you will dive those sky-high rates very low and when it comes to getting a handle on reducing your Credit Card debt, then its one thing you should consider very important.

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Now let’s assume you have $5,000 debt in your credit card with a 20% APR, now if you are to pay $150 per month, it’ll take you a whopping 50 months and $2,360 in interest to clear off that debt.

But if you are able to reduce that interest rate to 15%, which is roughly the national average for new credit card today and you save about $800 in interest rate and six months to clear off the debt. If you further reduce it to 12%, then you’re saving more than $1,200 in nine months’ time.

The big issue here is that banks are not and are not ready to give anyone a break on their credit card interest rates. So how do you make it happen? Below are some helpful tips to score a lower interest rate in your credit card.

Mike Sullivan, spokesman for the Phoenix-based non-profit credit and debt counselling agency in America recommends calling your card issuer at least every 2 years to ask them for a rate reduction. “Ask for something sizable,” he says.

one thing that makes this easy for you as a user is that it cost card companies some money to acquire their customer online and I tell you; they’re going to do everything humanly possible to keep and retain their good customers with them. With this fact, greater percentage say 2-3rd of cardholders who ask their card providers for a lower interest rate always get their request approved.

From what we’re seeing in the market now, you don’t need to be told that there is a tremendous amount of competition in the Credit card providers over credit card customers.

It also has the black sided part of it as not everyone who requests for the reduction will be successful reasons being that the more educated and wealthier you are the more likely and higher chances that you’ll get a break. A survey by creditcard.com found that credit card customers who graduated from college and earns more than $75,000 were more likely to be granted or approved of a lower interest rate in their credit card.

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What card companies look for?

According to the U.S. Public Interest Research Group, below are some of the factors that can influence card issuer’s decision on whether to approve a rate decrease or not.

  • The card’s credit limit.
  • How long you’ve owned the card.
  • How much you owe on the card relative to the credit limit.
  • How many times you’ve made a late payment.
  • How much you’re owing on all cards relative to their credit limits.

So before you call you bank, kindly check your credit report, Sullivan says, “If all of your credit lines say “pays as agreed,” then you should have a healthy credit history and are more likely to win approval”.

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How to Lower Your Credit Card Interest Rate | How to ask for a rate cut

So what do you say when you call for decrease in credit card interest rate?

You have to use a bargain tactics when you call, letting them know you’ve got other good offers from elsewhere. You can say something like this to your issuer:

“Hi, my name is ———, I’ve gotten multiple offers for cards with a good interest rate of 12% and no annual fee included. My APR on my current card with your bank (mention the name of the bank” is 19.9% which is quit high, I’d love to stay with your bank, but having gotten good offers elsewhere, I must say it’s hard to justify keeping that high of an APR. I’ve been a good customer of your service, is there anything you can do about reducing my APR?”

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Of course, however you ask the question doesn’t really matter, the main thing is that the decision won’t be made based on the customer service representative’s opinion of you. Just do a good bargain and do make a good research and learn the kind of interest rate that will best suit a person with your credit card. Credit Card Interest Rate best suited for you.

Also do keep your credit history clean because the better your credit history, the more likely you are to get a break immediately. Try and make sure you haven’t missed any recent payments. Pay down your current cards as much as you can and don’t apply for other loans. It’s never easy but do your very best to see that credit looks as perfect as possible and if it means holding off a few weeks or even more before asking for a break, that’s OK. If you’re successful in getting your APR lowered, congrats!

If they are not ready to grant your request of lowering your credit card interest rate, do remind them again and calmly, that if they can’t lower your interest rate, you will no longer be using their card, if they change their mind and decides to grant your request, great! If not, thank them for their precious time, end the conversation and go apply for one of those elsewhere cards with better terms.

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