by Beth Bond
No one likes to spend morethan they have to -- whether it's for a snazzy new pair of shoes or an everyday purchase such as gasoline.
And while you can't make an negotiation when it comes to the interest rate on the credit card.at the mall or haggle at the pump, there is room for
In fact, you can dramatically lower your credit card's annual percentage rate (or APR) with a single phone . But first, you'll have to do a bit of prep work and know the right words to use.
How Much Could You Save in Credit Card Interest?
Credit card companies generally aren't looking for ways to do you any favors, but pulling your phone out of your pocket, dialing an 800 number and asking the right questions could be all it takes to convince the company to slash your high rate. If you carry a balance from month to month, that decreasesave you some serious .
Let’s say you owe $5,000 on a credit card with an 18.9% APR and you make monthly payments of $150. Assuming you don’t add to the balance, you would spend four years paying it off to the tune of $2,146 in interest.
One phone savings jump to more than $900.to the credit card to negotiate the interest rate down to 15.9% would shave $504 off the interest charges. If you manage to drop it down to 12.9% the
And, of course, it helps to up the amount you make on your monthly payment when you can, too.
Gather the Facts to Find What a Good APR for a Credit Card is
First things first:lies in knowledge. Read through your credit card statement to locate your current interest rate. Check past statements online to confirm how long you've been making regular, on-time payments. Take a look around the website to find the low introductory rates offered to new customers. All of this information can be used to make a case for why you deserve a lower rate.
It pays to window shop among credit cards to get an idea for what a "good" or even "average" credit card APR is with current interest rates. A quick Google search for "What's the average credit card APR?" should give you a good benchmark for your negotions with your credit card company.
Think -- and Talk -- Like a Diplomat to Lower Your Card's APR
Negotiation is tricky business. Beyond being prepared, you're more likely to get what you want with the right attitude: polite but firm, patient but not timid. Call the customer service rep by name and speak with a friendly tone. It's easier for the person on the other end of the line to answer with a flat "no" if you meekly ask, "Do you think you could maybe lower my rate somehow?"
Instead, try opening the conversation with a line like this, plugging in your own details: "Hi, Josh. I'm calling because I've been looking over the terms of my account. Because I have a good, 12-year credit history with Discover, I would like you to lower my interest rate."
You can also try this script: "I'm considering anthat came in the mail for a card with a 0%-interest balance transfer. But I'd prefer to stay with this company because I've been with you for so long now. I'd like to have my standard interest rate reduced to 9%."
Remember, you're a valuable customer, especially if you've had your card for a number of years. So don't be shy about asking for exactly what you want. If you ever pay interest, it's to the company's benefit to keep you on board -- and happy. And if your negotiations don't seem to be going anywhere, politely ask to talk with a supervisor who has more authority to make adjustments to your account.
I’vethese scripts to the test with my own credit cards. By being straightforward with my request and pointing to the facts that prove my current APR is too high, I hung up the phone with a new rate 3% lower than before.
The lesson? Don't pay credit card companies more than you absolutely must. Make the! Becoming more knowledgeable about the terms of your credit card and asking for a better deal can't hurt, and any rate reduction can only help to save you . Get the facts on the rate you're paying and practice your tactic for bringing it down as low as possible.