One of the age-old tactics for reducing your credit card debt and lowering payments is asking your credit card company to lower your interest rate. But in a time of rising interest rates and high inflation, you may think asking for concessions from your creditor would be a waste of time.
A new study indicated it’s well worth it to make the call, though. Personal loan specialist LendingTree found that 70% of requests to credit card companies to lower the borrower’s APR were granted in the past year.
If you call your credit card company looking for help concerning your debt, what can you ask for?
- Lower APR.
- Waived annual fee.
- Waived balance transfer fee.
- Different due date.
- Higher credit limit.
- Waived late payment fee.
Based on the LendingTree study, 70% of requests for a lower APR were granted. Meanwhile, if you request a waived or reduced annual fee, late payment fee waiver, or a higher credit limit, your odds of success jumped to more than 80%.
Any of these concessions can save you money immediately or in the long term. If you request a higher credit limit, you’d have an 84% chance of approval. A higher credit limit could help increase your credit score, since your FICO score is based, in part, on your debt-to-available-credit ratio. As long as you don’t rack up more charges on the card after you receive the increase, you could see your credit score rise. In turn, that could lead to lower interest rates in the future.
To increase the odds of your credit card issuer granting your request, be sure to ask nicely. If the first person you speak with says no, you can ask for a supervisor or manager. If you’ve recently improved your credit or have a long history of on-time payments, point this out to the customer service representative.
It may help to prepare a script in advance to alleviate any nervousness when you make your case. If all else fails, call back another day. You may get another representative more willing to help you.
You also have a greater chance of success if you have some leverage. In other words, if you have another card available and are willing to make a balance transfer, you can let your credit card company know as much. They might lower your interest rate and / or waive fees to keep you as a customer.
Remember, every dollar you save in the new year can help you build a stronger financial future. Reducing the money you pay toward credit cards, while paying down your debt even faster, can make a big difference.
More From GOBankingRates
- 11 Signs You're Struggling Financially -- and 3 Ways To Get Back on Track
- 11 Uncommon Investments That Can Actually Make You A Lot of Money
- 3 Things You Must Do When Your Savings Reach $50,000
- The 4 Fastest Ways To Destroy Your Credit