Tips for Reducing Credit Card Rates
Despite the passage of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (it will go into full effect in February 2010), credit card companies are actually increasing interest rates on credit cards. Unfortunately for consumers, credit card companies are changing their policies to get around compliance with the new law. There may be some hope, however, in reducing your credit card rates if you have been paying your bills on time, keeping your monthly balances low, and maintaining a good credit score.
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Make Payments on Time Every Month
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Before asking your credit card company for a reduced interest rate be sure you have been paying your bill on time every month. Even one or two late payments during the lifetime of your account can be reason enough for the credit card company to turn you down. By showing the credit card company that you are able to follow through with your obligations by paying your bill, you increase your chances of getting a lower interest rate.
Have a Low Debt-to-Income Ratio
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If you have a low debt-to-income ratio, ask for a lower interest rate. Consumers with low debt-to-income ratios are good credit risks. This shows the company that you use your credit card responsibly because your balances are low. Even though credit card companies actually make more money off of consumers with bad credit, those with bad credit often default on their accounts, leaving the credit card companies with charge-off debts. Ask the credit card company to reward your restraint by lowering your interest rate.
Speak to Someone With Authority
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Make sure you are speaking to someone at the credit card company who has the authority to actually reduce your interest rate. The average representative answering your call does not have authority to lower interest rates and will most likely tell you that you are not eligible for a lower interest rate. When the representative tells you no, ask to speak to a supervisor. Once the supervisor comes to the phone tell him or her you have been a loyal customer and you want a rate reduction. If the supervisor says no, tell him or her you will close out your account and take your business and money to another company. If the credit card company truly wants your business, it will work with you in reducing your rates.
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