One way to conquer your debt is to call your credit card issuer and ask for a lower interest rate. Sounds easy, eh?
Before you grab your phone, let’s talk about the best way to go about doing this.
Evaluate your debt.
In order for this to be successful, you have to make sure this is truly a good option for you. If you have a large balance on your credit cart but have been making regular payments in a timely manner, you should be able to walk away from your phone call with a lower interest rate.
Make sure your current interest rate is above 13%. Anything lower is considered a good interest rate, so negotiating for a lower one won’t really do anything, and your issuer likely won’t comply to your request.
Prepare.
- Make sure you’ve got a copy of your most recent credit card statement on hand. Your statement will also likely have the number to call right on it.
- Know your current interest rate and be sure to have your account number and credit card number ready.
- Check your mail. If you’ve gotten any zero interest or low interest credit card offers recently, use them as leverage!
- Breathe. Negotiating with creditors is hard! Don’t let yourself get worked up and be persistent. Don’t give up easily!
Make the call
It’s best to make sure you speak with someone who has the authority to change your interest rate from the get-go, so be sure to ask if the representative that answers your call has that authority. If they don’t, ask to speak to someone who does. This will likely be their supervisor or manager. Don’t forget to be polite!
Here’s a script I found that might be useful:
Credit Card Agent: How can I help you?
You: I’ve been a good customer over the years. I just got an offer for a new credit card with a rate of 6%. I’d like to stay with you, but I’m paying 19% on my balance. Since I’ve consistently paid the minimum balance I’d like you to lower the interest rate on my credit card.
Credit Card Agent: I’m sorry. This is the best we can do with this rewards credit card. You’re getting our best rate.
You: Please put me through to your supervisor.
Then you’d repeat that script again, politely. (Source: Squawk Fox)
Be aware that you might not get a super low rate, but even 1-2% can knock off hundreds of dollars for you!
You might be skeptical about whether this option actually works. I get it, and I did the research for you. CBC did a study in 2008 about this very topic and with very positive results.
I’m shocked. Thirty years of paying 18 per cent when I could have been getting nine per cent,” he said.
Source: CBC
I knew this wasn’t an option for me so I didn’t try it. My AMEX had done far too much damage to my credit that I knew I wouldn’t qualify for a lower rate. What makes me so sure of this? I was told by an adviser at my bank that I had been put on a “watch list” because my AMEX was maxed out, which meant they would be observing my payment behavior for a couple months. I do still have an active VISA card (which remains in the hands of Aunt S), so I’ll give this a try for that card, at least as an experiment. I will definitely write about my experience.