How to Negotiate Credit Card Rate Reductions

Paying 20 percent interest or more on a credit card raises your minimum payments and makes paying off the credit card difficult. Negotiating a lower interest rate on your credit card is doable. Naturally, credit card companies want you to pay a higher rate because this increases their bottom line. However, if you're serious about eliminating your debt, asking your credit card company to lower your interest rate is one of the first steps. A lower rate reduces the interest incurred on the card and more of your monthly payment goes toward decreasing the principal.

Instructions

1

Use extra money to bring down the balance on your credit card. Credit card companies are more likely to negotiate a lower rate if you don't carry high balances.

2

Start increasing your monthly payments. Credit card companies will review your account history before agreeing to lower your interest rate. Making higher payments or paying more than your minimum each month shows you're determined to control your debt and they may reduce your rate.

3

Pay on time. Interest rates typically increase when a borrower habitually sends late payments. Make sure payments arrive before or on the due date to qualify for an interest rate reduction. Pay by telephone or via online payment systems.

4

Call your credit card company. Getting a lower interest rate on credit cards often involves asking the company to review your account and consider a reduction.

5

Discuss your history with the representative. Once on the phone with your credit card company, mention your history with the company, such as how long you've been a cardholder. Highlight your good payment history, if applicable. Speak with a supervisor if the representative doesn't have the authority to lower your rate.

6

Take your business elsewhere. Expressing your plans to cancel the account and apply for a low-interest credit card may persuade a credit card company to offer a rate reduction.