Quick Guide on Negotiating and Reducing Your High Credit Card Rates

When you think about credit cards, what is the first thing that comes to mind?

If you're like most people, the answer is “interest rates”.

That's because when it comes to credit cards, the largest fee that you're going to find yourself paying is the interest rate.

However, if you ask credit card users if they're happy with their interest rates, the answer for the vast majority will be, “No, I want a lower rate…”

So we have provided the below quick guide to help you lower your high credit card interest rates through the process of negotiation.

Negotiate with a Huge Credit Card Company?

I know, many of you are reading this article and thinking, “What? Negotiate with a huge company. They don't even care about me!”

The truth is that, although large corporations can afford to lose a client or two, it's in their best interest to do what they can to keep as many clients as possible.

So if they feel they may lose your business, chances are they'll be willing to deal! 

Step By Step Guide To Credit Card Interest Rate Negotiation

Get Prepared (Step 1)
No matter what task you plan on taking on, preparation will always help make sure that the process goes smoothly.

Here are 2 things you're going to need to prepare before negotiating your credit card interest rates.

  1. Create Your Debt Profile: Knowing which of your debts or credit cards charge the highest interest rate will help you decide where to start. Start your preparation process by making a list of your credit card debts. A great way to do this is to create a new spreadsheet in Microsoft Excel. Your list should include the lender's name, account number, balance, and interest rate.

    Once you've created your list, sort the data from highest interest rate to lowest. Because your highest rate debt is going to be the debt that costs you the most, this is where you'll want to start.

  2. Use Balance Transfer as a Negotiating Advantage: One of the biggest reasons that lenders are willing to negotiate with consumers is because they want to keep our business.

    Lenders are aware that you might have the option of transferring your credit card balance to a different credit card lender. As much as possible, they aim to prevent this from happening.

Knowing what offers are out there will give you ammunition when you actually start calling your lenders, and may give you a feasible option if your lenders are not willing to negotiate.

Call Your First Lender (Step 2)
It's important to start with the lender that charges you the highest interest rate.

When you call, chances are you'll be greeted by an automated service. Navigate through the options until you reach a live representative.

When that representative asks you what they can do to help today, say something along the lines of, “I was going through my credit card accounts and noticed that you are charging me a very high interest rate in comparison to the rest of my accounts. I love the card, rewards, and the customer service that you guys provide, but I can't see myself paying such a high interest rate with so many balance transfer options out there that can beat it. Is there anything you can do to make my rate more competitive?”

Follow the Conversation While Being Incredibly Polite (Step 3)

At this point, you've pretty much told the lender that you like the card and rewards, but if they don't do something to make the pricing more competitive, you're going to start working with their competitors.

Now, it's time to follow the conversation and let them dribble the ball that you just put in their court.

While talking to the representative, remember that they have the options, but they also need to click the right buttons on their screens to give you the lower rate.

If you are rude, you may not get good results.

However, if you're polite, chances are, the representative you're working with will be more willing to work with you.


Choose the Right Option (Step 4)

At the end of the conversation, the representative will probably give you two lower rate options.

The first option will most likely be a ridiculously low promotional interest rate that expires in a few months or so.

The second option will be a more long term lower interest rate. Although it may be incredibly hard not to jump at the lower, promotional interest rate, it's in your best interest to go with the long term savings option.

What if My Lender Doesn't Reduce my Rate?

Although many lenders are willing to negotiate with their customers, there are some that will simply decide not to.

Don't worry!

There was a reason we recommended that you take a look at balance transfer options at the beginning of this post.

It wasn't just to use the information as ammunition in the conversation.

If the lender isn't willing to lower your interest rate to keep your business, you should strongly consider making good on your promise to transfer your debt to an account with a more competitive rate.

What if I Don't Qualify for Balance Transfer Options?

If you don't qualify for balance transfer options, chances are there are other underlying reasons you want a lower interest rate that might include financial struggles.

If you are facing financial hardship, you may want to go about achieving savings from a completely different direction.

Consider signing up for services like debt consolidation or settlement.

You may also have the option to sign up for a financial hardship program with your lender.

Nonetheless, if you've found yourself in a rough position financially and overwhelming debts are becoming more and more of a burden, keep in mind that there are debt relief options out there.

You just need to do your research and choose the one that's best for you.