Credit card rate reductions are possible, but they are not likely to come without a bit of work on your part. Although a solid credit history and top credit rating can greatly increase your chances of nabbing a rate reduction, there is no guarantee you’ll end up with a lower rate on your existing credit card and you may want to search for a new one.
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Dropping your current credit card may only be needed as a last resort. You can first try out a rate-reduction strategy with your existing credit card using some guidelines offered by U.S. News.
How to Get a Rate Reduction
Asking your credit card issuer for a rate reduction can be the first step in possibly obtaining one.
Don’t be put off if your first request is met with a rapid no, as you may need to talk to someone other than the person who answers the phone.
Ask to speak with a manager or other executive to pose your question, and come armed with a number of reasons you believe you deserve one. A good credit history, high credit score, and long loyalty to the company are valid reasons for a rate reduction, as is noting other credit cards that have rates lower than yours and offer similar benefits.
How Much of a Reduction to Ask For
Being greedy or unrealistic with a rate reduction request can nip it in the bud, warns U.S. News. Don’t go into the discussion with your guns blazing and your rate set on a ridiculous amount that even the competitors are not offering. You may even want to refrain from mentioning a number at all and instead simply ask what kind of reduction can the company offer, if any.
If you do have to name a number, keep in mind that most credit card companies will probably not reduce your rate by more than a point or two. Although the reduction can seem small at a glance, put it in perspective in the big picture. Even one or two points may be able to save you substantial amounts of money over the long haul, especially if you use the card frequently and just as frequently carry a balance due.
Another number to pick is one that the credit card’s competitor is offering for a credit card with similar benefits. Similar is a key word, as you may find other card with drastically lower rates that don’t offer the same protections, credit limit, or other perks you are enjoying with your current card. Ask your current credit card company if it can match or beat a sweet deal on a card you found that has all the same benefits without the same high rates.
You may also have to be prepared to bail, however, if you threaten to leave your current credit card company unless it lowers your rate and it refuses a reduction. Don’t threaten with actions unless you are truly prepared to follow through.
Don’t Buy into Promises of Reduced Rates
Companies that call or contact you with the promise of reducing your credit card rates may simply be a scam, warns the Federal Trade Commission. The first sign of such a scam is if the company wants a fee up front to negotiate with your credit card company in your favor. You may never see that money again and never see any results.
Many of the scams have come in the form of robocalls, or recorded messages left on voice mails. They typically say they have an insider relationship with credit card companies and can reduce your rates, among other things.
Other promises from such scams have included giving you the ability to pay off your credit card bills up to five times faster than you would without their help or even a money-back guarantee if their services do not work.
Even when the services fail, the FTC reports many who have succumbed to such offers never see a dime in return.
If the companies are legitimately trying to help you, be aware that they are not likely to have an insider relationship with credit card companies and would not be doing anything special to help you. They would probably be following the same procedures you can do free, including asking for a reduction and being persistent in your efforts.
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