A Step-By-Step Guide to Reduce Credit Card Interest Rates

You may have reached a point where you pay hundreds a month just to cover interest on your debts – and while this can be manageable for some, it can also be a heavy weight on the shoulders of others.  If you happen to be one of the latter – cases where credit interest has become a major problem – don’t despair!  It’s easier than you think to reduce interest rates.

You can save hundreds a month!

If reducing credit card interest rates is something you want to focus on, the first thing to do is sit down, piece together a full list of debts, and figure out how much interest you paid just this last month.  If you find yourself in serious debt, there’s a good chance your interest will come up to hundreds.  Think about how much you might save if you reduced your interest rates by a couple of points each.  We think it’s more than a hundred dollars per month.

When this will work best

Reducing credit card interest rates can be difficult unless you have a big balance and have recently had trouble making payments.  It makes sense – if you make your payments on time and don’t have a lot to pay, the credit company won’t be motivated helping you because it won’t make them more income.  You need leverage, something that threatens to move your debts to other accounts.

Another factor

Your interest rate is something else to keep in mind.  If you are already as low as around 8%, the provider can’t do much to lower it any further.  This guide is better for those paying 13% or more in interest, but remember that reducing your credit card interest rate will only help if you already have a large balance – if you have $5000, and reduce interest by even 1%, that’s $50 a month.

Before making the call

All you really have to do is look at the back of your card and call the number.  But you’ll want to prepare before you make the call.

Reduce Credit Card Interest Rates

Have your most recent statement on hand

Make sure to have the latest statement from the credit company – it will tell you your interest rate at the moment, as well as list the account number you’ll need, and the phone number to call to make some changes.  In a nearby pile, have any and all card offers you have gotten recently – you might write them off as junk-mail, but some can give 0% interest or low costs to transfer a balance.  If you don’t have any on hand, look around online, or contact your credit union and see what they can offer.  It’s how you’ll get your leverage.

Pick a smart target rate

Write down the ideal number.  It might be as low as 9.9%, but you might not manage to get it reduced that far.  Still, get your head in the right place.  Calm down for a few minutes, fetch some water or tea, mentally prepare yourself – then pick up the phone and call.

Dial the number

The first important thing when dialing is to get someone who has authority.  You need someone who can actually make the change to interest rates.  Navigate the phone menu until you get hold of a representative – and it’s possible the first person you find might be able to do that.  The first question you want to ask is: “Do you have the authority to reduce interest rates?”  If they tell you no, ask about speaking to someone who can.

State your case

You’ll eventually find someone who can help.  State your case as clearly and briefly as you can.  You might tell them that monthly payments as of late have really stretched your finances, and while you might like to remain with the balance you have, you have another offer on hand (the ones you collected before making the call) with a better offer.  Ask if it’s possible for them to slash your rate to 9.9%.  What will probably happen is a moderate reduction – but be happy with that.  Always be polite, tell them thanks, and do not get angry if you don’t immediately get what you need.

This video has some helpful information for reducing your credit card interest rate, and what you can do if the representative cannot or will not help you.

Check out other options

If you’re lucky, you’ll get a rate reduction that makes you happy.  If you aren’t lucky, your reduction might be a piddling amount that just doesn’t cut it.  You still have options!

Look around for balance transfers

You might qualify for lower interest cards – and you can transfer balances over.  If you can get a 0% interest transfer card, that might be a good option for you.

Pick a loan to pay the card

A personal load from your credit union might pay your credit card right off – but it has downsides.  It moves your debt from unsecured credit debt, to secured debts, which can place your home in a risky situation.

Or just pay the big debt

If all else fails, pour all of your focus into getting rid of high-interest debts as swiftly as you can.  Get another job, start a small business to create income, or even sell things you never use.