Tips for Lowering Credit Card Interest

In a tough economy, getting into credit card debt can be easy and getting out can be difficult. One reason is that credit can be extremely convenient to use when cash is short and another major reason is that credit card interest can be quite high and accumulate quickly. Many people just chug along doing the best they can until the last straw falls and breaks the proverbial camel’s back. However, negotiating credit card interest rates is a viable option that can save you a considerable amount over a long period, especially if you have numerous cards.

According to statistics released by the Federal Reserve on July 24, 2012, the average credit card debt per household was $15, 799 with 13.9% of disposable income going to pay that debt. Interest is a large part of such debt so the lower you can drop APRs on your cards, the more available income you will have for other necessities. Many credit card companies will work with you on reducing interest rates as long as you follow some simple guidelines. Here are some tips to help you reduce interest rates through negotiation.

Start with Cards You’ve Had the Longest

If you have multiple credit cards, begin calling companies that you have been with the longest. Long-time customers are worth keeping and such companies will usually negotiate in order to keep good customers. Even if you have fallen behind occasionally on payments, if you have made steps to get things in order then that also is taken into consideration.Continue calling companies by going down your credit card list according to date.

How to Negotiate

When negotiating credit card interest rates, you should maintain a certain composure and utilize various tactics. First of all, be polite but strong. You also do not want to ask representatives to lower your rates, but instead say something like “I want to check on lowering my credit card interest.” If you have paid faithfully, emphasize that as well as the length of time you’ve done so. You should also keep credit card offers from other companies and quote them as possible switch overs. If your company thinks you might leave, they will be more willing to give you a lower rate.

Bad Credit and Maxed Out Cards

If you have fallen behind on credit card payments or you have almost reached your credit limit then it most certainly will be difficult to get companies to agree to interest reductions. This is where older cards have the best chance since you have a longer history for companies to read. Every little bit helps. You should still try to get interest reduced even on other cards since some companies may comply.

Fix and Protect Your Credit

Any credit cards that were denied lowered interest were probably due to late payments or maxed out limits. Therefore, work on making timely payments and reducing limits and then call back in a few months and try again. If companies see that you are making a sizable effort, they will be more responsive. If your credit is very bad, you can look into options for secured credit cards that are quite affective at rebuilding bad credit.

Another important step that you can take of which many people aren’t aware is to protect your good credit. Credit theft is on the rise with 10% of Americans having been credit card fraud victims. Therefore, a small investment in maintaining credit card security can save you thousands of dollars from both fraud and the credit damage it can cause.

Don’t Give Up

The bottom line for effectively negotiating credit card interest is to not get discouraged and give up. By remaining persistent, you will eventually win the assistance of credit card companies and reduce interest rates. For any cards that cannot be reduced due to payment or maxed limit problems, simply keep working on restoring them and call the companies back again.

Joy Mali is an active blogger who is fond of writing articles on Credit Protection and advising people to immediate steps by informing authorities if your card is lost or stolen. Follow her on Twitter to know more onhow to effectively negotiate reduced rates on credit cards.