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Have high interest credit cards? You may be able to lower them

On Behalf of | Jul 6, 2018 | Credit Card Debt

Are you frustrated by overwhelming high interest rates on your credit cards? Does making the minimum payment each month feel useless because the interest charges nearly replace that payment? Did you know there is a chance you can lower your interest rate just by asking?

Right now, the average interest rate on a credit card is over 16%, it is over 20% for cash out credit cards. If you see your cards at these rates or higher, there are ways to lower the rate without finding a new card that will charge you balance transfer fees. All you need to do is speak with your credit card company or bank and negotiate with them on a new lower rate. Of course, they may very well say, “no,” but they are more likely to approve a lower rate if you follow these steps:

Know what type of situation you are currently in with them 

Knowledge is power. Before you speak to a live person about the terms on any of your accounts, do research to see exactly what has been happening with that account over the last year. You should know the current balance, interest rate, payment history including late payments, current statement due date and the grace period. Once you are prepared with this information you will be able to evaluate and understand any options you are offered.

Check your credit report 

If you haven’t checked your credit report in the last year, you can view it for free from each of the three credit monitoring services. You should be aware of your whole financial situation besides just the credit card you want the lower interest rate on. It is also recommended you know your credit score. You can use this information to help you during negotiations. A strong credit score and credit availability will show you are more likely to pay off the balances you owe, which in turn will make the credit card companies more willing to work with you.

Find offers from competing credit cards

Just like any business with competitors, credit card companies don’t want to lose you and your monthly payment to someone else. If you find a credit card offer, write down the name of the credit card and the terms they are offering. This will be vital information to share when you call your current credit card company.

Look at the situation from the perspective of the credit card company 

If after you accomplished all of the above steps and you see red flags popping up, ask yourself if you are too high risk to get a better deal. Consider taking time to fix the problems you found before asking for an interest rate reduction. It may be a good idea to still call and ask, the feedback you get can only help if you are refused. There is no reason you can’t call back in a few months and ask again.

If it just isn’t working and negotiations with your credit card company are getting you nowhere, you should see if you can transfer the balance to another credit card with a low introductory offer or find other means to pay down the high interest debt. High interest credit cards will keep your debt longer and take more money out of your pocket, so look for other avenues to lower it or eliminate it as fast as you can.

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The Law Office of Kim Covington, is a woman owned debt relief agency, and I have helped families, individuals and small businesses, file for bankruptcy relief under the U.S. Bankruptcy Code, for over 24 years.