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How to Negotiate Lower Interest Rates on Credit Cards?

7 October 2009 by CreditCardsCo™

Negotiating a lower interest rate isn't impossible although it seem difficult to achieve at first. A creditor also knows you wouldn't come to them if you didn't need it. If you have followed these tips provided below then your chances of getting accepting are higher than before.

Learn your FICO Score

Have knowledge of your FICO score gives you the advantage of knowing the average interest rate on credit cards offered to consumers with scores similar to yours. Visit myfico.com to get your FICO score.

Explain your Situation

The first step is to contact a customer representative give a brief overview of your situation and preferably ask to see a superior who is able to take your case. The average representative will object to this until they know your serious, when this happens hold your ground and state that you want a superior who can lower your interest and possibly waiver the annual fee. If your creditor operates an office close by, it's probably better to go physically. Once given the floor be sure to explain your situation in detail. Do not threaten to close the account rather mention you've received other offers you're considering. If your situation is that bad you might want to tell them a reduction in interest rate could go a long way to help avoid bankruptcy and falling late with payments.

Make an Offer

When going into a negotiation it pays to have something in mind. Do the math and come up with a figure that gives the breathing space you need to cope with monthly payments. You could make an offer seeking to reduce or eliminate your annual fee and interest rates. You don't expect your creditor to accept your offer but it could serve as a point of reference when negotiating. Keep it in mind that it is often harder for creditors offering reward cards and similar cards to reduce the annual fees on request as they'll likely have a contractual agreement with a third-party that includes a certain annual fee.

Build a Good Payment History

It's no use having a bad payment history and trying to negotiate lower interest rates. By building a good payment history, your creditor knows you're a trustworthy customer they can rely to pay promptly. It's then easier to convince creditors to lower interest since they're already aware of good payment history which will likely lead to an improved credit rating over time. Lenders with a solid track record are more likely to get their pleas accepted so keep this in mind.

Find Better Offers

Don't bluff. If your credit card company wouldn't bulge you should begin searching for better offers on the internet. Be sure to compare your current card with any potential offers. Find features of interest and go through terms (card agreement) to confirm what you've seen on the front page.

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