The majority of Americans use a credit card to pay for purchases every single day. And a large percentage of people don’t pay off the entire sum by the due date, acquiring credit card debt and paying interest on it. For a lot of people, credit card debt is one of the obstacles in the way of achieving financial independence. If you feel like you don’t have enough control over your credit card debt and you need to do something about it, a great first step is to try to lower your credit card interest. This way you can pay less in interest and work down your debt faster. But how do you reduce your credit card interest? Well, here are a few tips:
Ask your credit card company to lower your interest rate
Not a lot of people are aware of this, but you can actually simply call up your credit card company, ask to speak with a representative and ask them to lower your credit card rate. They may or may not agree but the worst thing that can happen is they say ‘no’, so it doesn’t hurt to ask. To help the negotiation go better, try to do some of the following:
Improve your credit to lower your credit card interest rate
Having a good credit score is one of the best arguments you can have when negotiating a credit card rate with your credit card issuer. So before you pick up the phone and call them to ask for a lower rate, check your credit card rating - has it improved since the time you applied for your credit card? Has your credit score been rising steadily over the past few months or years? If this is the case, it’s a great time to ask for a lower interest rate on your credit card and use your improved credit score as an argument. If you always pay your bills and make loan payments on time, it’s also an excellent point to make. On the other hand, if your credit score is not doing so well right not, you might want to hold off your call to the credit card company and take steps to improve your credit score in the meantime.
Pick the right time to ask for a lower credit card interest rate
If you have a good credit score of 670 or higher, you should try to choose a good time to ask for a reduction in your credit card rate. The best time to call your credit card company and ask them to lower your credit card rate is right after a significant improvement of your financial situation. This could be a paid-off loan, a raise, a significant reduction in your debt or a move to a less expensive home or area. All of these events lower your debt to income ratio, which is one of the parameters credit card companies take into account when setting your interest rate.
Get offers from other credit card companies
Having other offers on hand is a great tool in any negotiation, whether you’re negotiating a lower credit card interest rate or a raise at work. Even if you’re not looking to change your credit card company, get several offers from other credit card issuers and keep that information in from of you when making the call. Then, use the offers you’ve received to further strengthen your case - if you’re a good client, your credit card company will want to avoid losing your business.