Credit Scores and Reports

Card rate too high? Negotiate a better one or transfer balance


If you’ve been paying on time for a long time, you shouldn’t be stuck with a 29 percent APR. Ask for a lower one; if they say no, transfer the balance

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Question for the expert

Dear Credit Wise,
My credit card company for years charging me 29 percent interest on balances for several years, I have been asking them to lower the interest but they decline, saying they cannot. Can you suggest any remedy? — Charan


Answer for the expert

Dear Charan,
Sometimes it just doesn’t pay to be a good customer. This situation appears to be one of those times. Your creditor is happy with the status quo and sees no reason to change things now.

Of course, the fact that you have a credit card with an interest rate of 29 percent suggests that at some point, you may not have been the best customer. Very few credit cards start out that high, unless you were a high risk to begin with. What I assume may have happened is that you were late on your payments a few times or you went over your limit (or both) and the company raised your rate. You say you have had the card for years, so it very well could be that your card and the accompanying interest rate predates the federal Credit CARD Act of 2009, which limits how card issuers can raise interest rates.

Assuming that you have been staying under your credit limit and making your payments on time for a long while now, I can understand why you are asking for a lowered interest rate. However, as you have discovered, this is not an easy task to accomplish. The first person to answer the phone when you call may tell you that they cannot do what you are asking. If that’s the case, you must get to someone higher up who can make a decision in your favor.

It will take some preparation and perseverance on your part. You will have to call and ask the question again and (probably) be turned down again. When that happens, ask to speak to a supervisor. Before you call, be sure you know all the relevant facts about your account — how long you have had the account, your payment history, your current balance. You also need to know your rights. The CARD Act does say if an interest rate is increased, the interest rate hike should be reviewed every six months to determine if a reduction is called for. This does not apply to cards whose rates were raised before the act went into effect. It could, however, sway the creditor to your side if you include that in your argument.

If you are unable to get your rate reduced, I suggest you research a balance transfer to a lower rate card. It will be worth the very small ding you might take to your credit score to have a more manageable interest rate. Be sure to tell your creditor that you are considering that option as well. You have been their customer for several years and when push comes to shove, I don’t think they will want to lose you.

Remember too that your ultimate goal should be to pay off your balance(s) in full every month, which makes interest rates irrelevant. I understand fully that paying your debt off in full at his moment may not be possible but you need to strive to do so.

Be wise with your credit!


See related: Six on-time payments can erase penalty rate, law says


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