If there is anything that can make your spending less fun for you, it’s the ongoing debts. Some plan these debts for some specific purposes while others get forced by unconventional circumstances. Either way, the debt goes a long way with you until you get it off your accounts with struggles of years. So, you need to work diligently to lower credit card interest rate.
Americans go a long way with their debts just paying the minimum monthly payments. So, if there is an increased interest rate or annual percentage rates (APR), then they have to pay for longer tenure than they expected.
Fortunately, there are ways to help you find how to get your credit card interests lowered without having to opt for zero interest cards and a large sum to pay for not reading the fine print closely.
Strengthen Credit Profile To Lower Credit Card Interest Rate
Strengthen your credit profile. A strengthened credit profile helps you fight off your debt in many ways. The numbers on your account are the indicators of your trustworthiness to the credit card company. Here are some ways to put those extra stars on your credit profile.
Give your best to keep your credit score in the range of 670-739. It is known to be a good credit score. A good score can ease off your way of getting a good cut on your interest rate of the debt. Tracking your credit score also provide an assessment of your progress towards chipping away the debt.
If you have taken debt from the issuer, try to make the repayments on time. By making cuts in your budget, try to make a few earlier payments on time. This will help you with leftover debt later on. The repayments on time add value to your credit profile by boosting your credit score. The creditor is more inclined towards cutting the APR of a customer with a good credit score.
It might take some extra effort for you to strengthen your credit profile, but it’s worth it. A credible profile helps you make a reliable customer to the company. You have a better chance to cash the reliability with your strengthen profile.
Be A Strong Negotiator With Knowing Credit Card Risk Measurement Method
Credit card companies assess the debtors based on standards named “Credit Card Risk Measurement”. Understanding these standards can help you negotiate a lower APR on the credit card.
The on-time & scheduled payments make up an excellent credit history. Credit card companies hate losing a loyal customer with a good credit history. Use this to your advantage while negotiating your way out of the debt.
Regularly scheduled on-time repayments are good leverage to you while negotiating. If the company is getting a continuous and reliable payback, the issuer is more likely to give you a cut on APR to capture more future equity form you.
Capital Or A Down Payment
It is the amount that the borrower put towards the loan issued. A larger value of the capital or down payment deposited towards your debt is a five star to your credit profile. These payments are worth mentioning in an attempt to get an interest rate lower lowered on your credit card.
Collateral are the assets the issuer stays in the procession of until you pay off the debt. The credit issuer often provides an impressive amount of lower interest rate when ensured by collateral. By backing up your credit with one of your assets, you can get the minimum amount of APR on your credit.
Understanding these assessment standards will benefit you in negotiation. Once you get to know the company’s requirements for a good customer, it’s easy for you to take advantage while negotiating. Credit Risk Measurement also helps you in the personal assessment. It tells you the progress and shows potential grounds for improvements to speed-up the repayments of your debt.
Line-Up Competitor Credit Card Offers
You might have learned a fact from your extensive research on how to lower interest rates on the credit card.
The credit card companies around the globe are in tough competition. Think of those thousands of promotional emails you receive in one day. The companies are trying to lure the customer with several benefits and lucrative return rates and offers.
You can use the competition to find the credit card that best suits your financial capabilities. While your current issuer is charging you what seems to be a reasonable rate, there might be someone with even lesser rates.
It is always a positive step to line up all the competitors’ offers. These offers can help you find a card that best fits your repayment capacities. Lining up different offers can also help you in negotiating the rate with your current issuer. If you mention the competitors offer to your current issuer, there is a fair chance of getting a lower APR on loan due to high competition.
An important thing to consider while lining up other cards is, do not immediately opt for any card based on lower interest rates. It is better to consider factors like annual fees and other benefits that your current issuer is providing. The lower interest rate might not worth the benefits and rewards in some cases.
Call Your Credit Card Issuer And Politely Request To Lower Credit Card Interest Rate
Repeatedly calling your credit card company increases the possibility of approval on your request to lower APR on the credit card.
Do not be afraid to call your company for a lower interest rate. Making the calls to your credit card company for easing your debt has more chances of setting you debt-free than having to pay in the next three to five years.
In the worst-case scenario, if you get a rejection, call the company again. Calling several different times will get you in contact with many other representatives. It increases the chance of approval on your request. If the negotiation seems to get stuck along the path with the representative, alter the tactics.
Keep calling until you find someone willing to give you the relief. Note the name and number of the person to keep the negotiation going for a longer time. Your chances of convincing them are higher this way. Once the preliminary acquaintance is set-up with a customer representative, you can request him to get you in contact with a more authoritative member who is in authority to lower the interest rate on your credit.
Timing It Right When You Have Low Credit Utilization Ratio
Repaying the debt on an ideal time helps you speed up the repaying with a minimum amount of interest amount.
A credit utilization ratio is a good indicator to tell you when is the best time for you to pay your debt off.
A credit utilization number is a ratio of credit utilized to the limit of the total credit given to you by the issuer. A lower utilization ratio is a good sign for you to pay off the debt. Paying debt on lesser credit utilization ration gives a boost to your credit score.
Also, An ideal ratio of debt to total credit limit is 30% and lower. The debtors should maintain the utilization ratio of below or equal to 30% to maximize benefits. A larger number than the ideal 30% might not be a good sign for you because of the negative impact on credit score.
Apart from a good credit utilization ratio, one should also pay their debt immediately after getting a raise or a bonus on their salary. It is a wise decision to add the money saved at the end of every month toward the principal of the debt. You can speed up the repayment of your debt when scheduled with non-planned savings.
Apply for the credit card exactly when your existing credit utilization ratio is minimal, to maximize your credit card approval rates.
I am a data analyst by profession who loves to crunch numbers at daytime and come home wondering how my passive income numbers for the day look like. I believe in being rich rather than looking rich. Follow me for Cryptocurrency, FIRE, Personal Finance, Credit Cards and Digital Nomad updates