How to Write a Letter to Reduce Credit Card Interest Rates

Reduce Interest, Save Money

Whether you're buying groceries, gasoline or clothes, if you're like most consumers, you're constantly on the lookout for deals. After all, no one likes to pay more than they have to. Your credit-card rates are no exception. Just like all of those other products, you probably want to find the best deal you can, and as a seasoned bargain shopper, you might be longing for a lower interest rate. Well, contrary to what you might think, it can be done. In fact, in a 2002 survey conducted by the Public Interest Research Group, 56 percent of users who requested lower interest rates got them. Here's how you can write a letter to request a reduced interest rate.

Things You'll Need

• Contact information for credit-card company
• Offers from other credit cards

Instructions

1. Keep any credit-card offers you receive in the mail that promise a lower interest rate than your current card provides. If you haven't received any (or have already disposed of them), do some research online to see what other companies are currently offering. Any promotional offer for balance transfers are also good to have.

2. Look up the current prime rate. In general, the interest rate on your credit card should be no more than 9 percent above the prime rate.

3. Make sure you have a good payment history with the credit-card company you are contacting. If necessary, obtain a copy of your credit report to verify.

4. Locate the credit-card company's contact information. Before writing a letter, you may want to try calling first.

5. Write the letter. Refer to the Resources below for an example. Make sure to include the amount of time you've been a cardholder, your current interest rate and the reasons you feel you deserve a reduced interest rate. You should also detail the other credit-card offers you've received.

6. Notify the company that, if your interest rate is not reduced, you will close your account and transfer the balance to a new credit card. Include your contact information.

7. Contact the company by phone to check the status of your request if you have not heard anything within six weeks.

Tips & Warnings

• If your request is denied, go ahead and transfer your balance to another card. After your account has been updated to reflect a zero balance, write another letter to the company to let them know that you are closing your account because of the card's high interest rate.

• Your credit score may be affected if you close an account (even if it has a zero balance). Be aware that, after the closing of an account, it may take 3 to 4 months to see an improvement in your score.

Resources

• View a Sample Letter