credit cards

Can you get a lower credit card rate?

Leslie McFaddenQuestionDear Credit Card Adviser,
Is there any way to get a credit card company to lower your interest rate? After looking closely at my statement I see that I'm only paying the interest charged and almost nothing on the credit balance itself. Do you have any suggestions? Thank you.
-- Terrie

AnswerDear Terrie,
I have a few suggestions for you. One obvious solution is to make a larger monthly payment if you can. Plug the new payment amount into our pay-off calculator to estimate how much quicker you would pay off the balance.

As for the interest rate itself, the Credit Card Accountability, Responsibility and Disclosure Act of 2009, or Credit CARD Act, might provide some help. It requires issuers to review rate increases imposed on or after Jan. 1, 2009, every six months and reduce the rate if the reason for the increase has improved. This evaluation is supposed to be done automatically, with no action necessary from the consumer. No specific amount of reduction is required, however. An exception to that is if a 60-day delinquency triggered the rate hike. In that case, the increase must terminate within six months if the cardholder makes at least the minimum payment on time during that period.

You can also take matters into your own hands by negotiating with your credit card issuer for a lower interest rate. Do your research first by comparing your current interest rate to the APRs on credit card offers for new customers. When you call customer service, politely ask for a better interest rate on your credit card. You may want to provide a few reasons why you deserve a break, such as the number of years you've been a customer, how frequently you use the card, your solid payment history or that you are considering a balance transfer to a competitor's card with a lower interest rate. Request a supervisor if at first you don't succeed.

Keep in mind, however, that the issuer may review your credit and account history during the request. A blemished record could result in not only a denied request, but a negative change to your account, such as a credit limit reduction. The plan may not work, for instance, if you already have the lowest interest rate, hold a credit card with subprime terms or carry a large balance. If the issuer refuses to give you a lower APR, ask the reason. Find out what you need to do to qualify for a rate reduction.

If your request doesn't work, you may want to consider a balance transfer to a new card with a low introductory rate on debt transfers. You'll need a good-to-excellent credit score to qualify for the zero percent offers and may have to pay a transfer fee, usually 3 percent to 5 percent of each balance transferred. Use our balance transfer calculator to see if moving your balance will help you pay it off faster.

If you are asking about a lower interest rate because you are having trouble making the minimum payment each month, you may want to seek out a nonprofit credit counseling agency before your debt spirals out of control. A certified credit counselor should review your budget and help you decide if a debt management plan makes sense for your situation.

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To ask a question of the Credit Card Adviser, go to the "Ask the Experts" page, and select "Credit Cards." Read more columns by the Credit Card Adviser. Follow Leslie McFadden on Twitter.
 

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Product Rate Change Last week
Balance Transfer Cards 15.66%  0.01 15.67%
Cash Back Cards 16.36% --0.00 16.36%
Low Interest Cards 10.87% --0.00 10.87%
 
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