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Many people don’t take advantage of the bargaining power you have as a credit card customer. Your credit card interest rate and annual fee are negotiable, with rates ranging across the board depending on your payment history, revolving debt and the amount you pay each month. Lowering your interest rate can save you hundreds of dollars in interest and can be done with a little research, a phone call and some persuasive bargaining.

Do Your Research
Collect information from all of your credit cards and find out which ones have the lowest interest rates. You should also round up outstanding balances on your cards, your FICO credit score and have any additional mail offers on hand. Visit an online banking site to compare the average rates. Find out details about introductory offers, noting the grace period and the shelf life of the introductory rate, the late fee, and further terms and conditions. After you have the information organized to compare and contrast, call your credit card company to bargain and ask for a lower interest rate in that ballpark. While you could easily jump ship to another card at a much lower rate, give your current credit issuer an opportunity to match or improve upon the comparison rate.

Trial Period
If your credit card company is reluctant to lower your rate, request a trial period. Ask to compromise with a lower rate for six months or so, explaining that you will be able to pay down your debt faster. Leave room for negotiation at the end of your trial period asking the card issuer to reevaluate your success at the end of the period.

Transfers
If your credit card company refuses to yield to negotiation, transfer your balance to a new card with a better rate elsewhere. Read the fine print about balance transfer interest rates and make sure it’s free, as they may be higher than the interest on purchases. If possible, cut up the old card, but don’t close the old account, as that can have a negative impact on your credit rating.

Other Benefits
If you pay off your balance in full every month, interest rates don’t matter. Instead, focus on other benefits that your credit card company could offer, such as miles, cash rebates, points or no annual fees. Oftentimes the annual fee can add up to more than your monthly finance charge, especially if you pay your bill in full each month.

This was a guest post by ChicagoBankingRates.com, a site that provides daily updates on the latest Chicago mortgage rates, finance information and more.

Filed under: Credit Card Rates by Admin 3