Asking for lower interest rates...did it work?

**greenskeeper** · 04-04-2012, 01:03 PM

I don't know what "good" interest is on a CC, as I carry only ONE CARD and don't carry a balance (paid in full each month).

That being said the reason CCs are higher interest than other loans is that they aren't secured by anything, such as a car or house. If you fail to pay a car payment, they take the car. Same with a house.

You might look into consolidating the balances into a home equity line of credit if possible, rates would be much lower.

**disneysteve** · 04-04-2012, 05:50 PM

What is the credit line on each card and what is the outstanding balance? Do you have any other debt? How much do you earn? How old is your oldest card?

All of those things matter. A short credit history, a high credit utilization, a high debt to income ratio - those things lower your score and raise your rates.

A better question is why do you have credit card debt? That means you have been spending more than you earn for some reason.

**jpg7n16** · 04-04-2012, 07:01 PM

Originally posted by DogDiva View Post

Ok...so new here...did the unpleasant task of facing reality in the credit card "stuff" debt and the big surprise is the interest rates.

The back story is, there is no reason that I should have high interest rates.

Yes there is. You're borrowing on a credit card. The high interest rates are a feature of convenience borrowing.

I have 5 cards, and the lowest rate I have is 13.99%, the next is 16.9%, then 18.74%, then 20.24% and the final one is at zero percent until later this month, and then goes to a whopping 23.99%

So my obvious choice is to call and ask for lower interest rates...

I disagree. The obvious choice is to pay off the cards and not keep a balance.

Lowering the rates is just managing the symptoms. You can call and ask, but it'd probably be better to transfer the balances to another 0% offer and pay it off ASAP. And keep them paid off.

**JustBill** · 04-04-2012, 07:23 PM

I don't think it is as common now as it was in years past that asking for a lower APR will result in same. Additionally it will depend on the lender and I expect the outcome will vary.

I can relay on a firsthand note that PNC upped the APR on DS's personal line of credit last summer by 4% for no particular reason. When challenging PNC on this increase and requesting a stay at current rate, PNC declined to accommodate. And FWIW, DS received a no-interest balance transfer credit card offer from PNC within days of their notification of rate increase, yet bringing that offer to their attention, they still wouldn't back down.

**DogDiva** · 04-05-2012, 07:14 AM

Originally posted by disneysteve View Post

What is the credit line on each card and what is the outstanding balance? Do you have any other debt? How much do you earn? How old is your oldest card?

All of those things matter. A short credit history, a high credit utilization, a high debt to income ratio - those things lower your score and raise your rates.

A better question is why do you have credit card debt? That means you have been spending more than you earn for some reason.

I have just come here...in my blog, I have laid out all the balances and the why the balances are there, but the obvious answer is I was foolish and now it is time to deal with it.

I have some high limits...my credit history is at least 17 years in the making...all good. Only 2 of my cards are above 50% utilization...but none are above 75%...I

Originally posted by jpg7n16 View Post

Yes there is. You're borrowing on a credit card. The high interest rates are a feature of convenience borrowing.

I disagree. The obvious choice is to pay off the cards and not keep a balance.

Lowering the rates is just managing the symptoms. You can call and ask, but it'd probably be better to transfer the balances to another 0% offer and pay it off ASAP. And keep them paid off.

Yes...the obvious choice is to pay them off...which is why I am here, and blogging about it, but despite having a good income, I am not going to pay off $30k overnight, which is why if I can lower interest rates it will help me during this process.

Originally posted by JustBill View Post

I don't think it is as common now as it was in years past that asking for a lower APR will result in same. Additionally it will depend on the lender and I expect the outcome will vary.

I can relay on a firsthand note that PNC upped the APR on DS's personal line of credit last summer by 4% for no particular reason. When challenging PNC on this increase and requesting a stay at current rate, PNC declined to accommodate. And FWIW, DS received a no-interest balance transfer credit card offer from PNC within days of their notification of rate increase, yet bringing that offer to their attention, they still wouldn't back down.

Yes...this is what I am afraid of...but I guess it will not hurt to ask. And in the mean time, I just have to buckle down and pay things off as quickly as I can.

If anyone reading this has had luck in getting interest rates reduced...I would love to know how you asked...what you found to be successful.

Thanks for the replies.

**bjl584** · 04-05-2012, 11:50 AM

Your creditors may or may not work with you. Your best strategy would be to seek out a 0% card and transfer your debt to that. Then pay it off before the introductory rate ends.

**woodie96** · 04-05-2012, 12:10 PM

I agree with bjl....I don't think you will be very successful in getting the rates reduced because currently you are a good paying customer.
I would look for a 0% card if I could find one and transfer less than I think I could pay off prior to the scheduled increase, just in case something funky happened.

It would depend on the interest rates and balances as to which one I would start with.

Last but not least, you will have to get rid of those accounts and quit using them. Like I have read on here many times...."YOU CANT BORROW YOUR WAY OUT OF DEBT."

**dczech09** · 04-07-2012, 08:22 AM

OP,let me ask you this...

What if you were the lender? What if you borrowed someone money at a high interest rate, they rack up a balance, and then they call you asking for a lower rate? Would you give them a lower rate? The answer should be "no" because that would be stupid.

They are getting paid by you at the interest rates as they are. They are going to try to get as much money out of you as possible. The CC companies have you on the hook right now, and they intend to pull you in (fishing metaphor).

The only way they would consider lowering the interest rate is if they were afraid you were going to transfer your balances elswhere, or you were defaulting because you do not make enough money.

You have been paying on time. So they no there is no risk of default. Also, if you have a lot of debt, it is very unlikely you will be able to get a consolidation loan or line of credit.

Get on a budget. Stop spending more than you make. Pay off the balances. Then stop keeping a balance on the credit cards. This may sound like a repeat of what has been said, but it is the only answer.

**jpg7n16** · 04-07-2012, 09:37 AM

Originally posted by DogDiva View Post

Yes...the obvious choice is to pay them off...which is why I am here, and blogging about it, but despite having a good income, I am not going to pay off $30k overnight, which is why if I can lower interest rates it will help me during this process.

Didn't realize your debt level was that high. When you said:

Originally posted by DogDiva View Post

I have good credit (last time I remember getting a score it was in the 700s), I pay everything on time, over the minimum, and nothing is maxed out, or even close.

I took that to mean you had a few thousand on each card, maybe $10-15k total. Which, you can pay that off before changing the interest rate has any real effect.

-------------------------------------

For those who didn't catch it, I saw you stated the balances and rates were listed in your blog post, so I'll repost those here for convenience of the discussion:

From: The scary list...laying it out there...: DogDiva's Personal Finance Blog

Card #1 Bal = $13,996.00, 0% until 4/12, then 23.99%
Card #2 Bal = $7,251.71, 18.74% interest
Card #3 Bal = $3,587.86, 13.99% interest
Card #4 Bal = $2,859.09, 20.24% interest
Card #5 Bal = $2,654.15, 16.90% interest

Grand total "stuff" debt = $30,348.81...

I've said it, Brian's said it, woodie said it, and dczech hinted at it: you would be better off transferring to a new 0% offer, than attempting to get the rates reduced.

Balance Transfer Credit Cards - Many choices available for your transfers - CreditCards.com

And we're not trying to avoid your question, we're trying to be helpful. Transfer the cards with the highest interest rates, starting with card 1, and transfer as much as possible. You will save more on interest this way than if you were able to call and get your rates reduced.

CC debt is a different animal, and I hate to break it to you, but 13.99% on a CC is actually a low rate. So why bother trying to get them to reduce it to 13.99%, when you have the option to transfer to 0% for up to 18 months?

**stazstaz** · 04-07-2012, 10:51 AM

I have 3 credit cards, one was at 17%, one was at 19% and the other one was at 21% and I called up each one and asked to have it lowered and it worked. Sometimes they'll say they can't lower it, but they can transfer your balance to a different card with a lower interest rate or you can speak to their supervisor and get it lowered then. Also, banks try and keep their customers so if you got one credit card lowered down to 10% from a different bank and the bank you're dealing with now will only lower it down to 15%, let them know that their competitors are offering better rates and you might take your business there.

My new credit card interest rates are at 9%, 12% and 13%.

**dczech09** · 04-07-2012, 12:13 PM

The only problem with the 0% plan is that with so much debt, you may not qualify. Of course it does not hurt to apply and see if you can get a good deal. But banks look at more than just your FICO score when extending credit these days- especially those 0% promotions.

The banks with look at debt-to-income ratio and debt utilization.

With that said. You could try to talk your bank into lowering your rate by telling them that you may go to a competitor, but it still may not work. If the bank sees you as a bad risk, they will not bend.

Give it try though. The worse they can say is "no." Just do not expect too much from them.

**kv968** · 04-08-2012, 02:43 AM

It can't hurt to ask them to lower your rate but, as the others have said, you'd be better off if you can transfer to a 0% CC. I'd take a shot at trying to get a new CC that offers a 0% rate but if you can't get one then see if you can at least transfer to the current one with 0%.

The tranfer will usually cost 3% of the amount but currently, on the cards you're paying interest on, your average MONTHLY rate is about 1.5%. That's costing you about $245/month in interest alone on the balances shown. If you could transfer all, or at least most, of that to 0% you could take that extra money and start getting those balances down.

**DogDiva** · 04-09-2012, 07:14 AM

Thanks everyone for your replies...I really appreciate it.

Since coming here, I have been trying to figure out the game plan so to speak to deal with the debt monkey I have placed on my own back...and to get rid of him for good.

I probably will look to see if I can transfer the highest rate, and highest balance card to another one at a lower rate, or 0% rate...that way I can tackle the smaller ones and snowball into the larger balance....will have to see what works best.

I also kind of figured since I am a good payer, and they make good money off me, they would be less likely to lower rates...but in a few weeks when I am slower at work, I will call and try to ask...it will not hurt to ask, and I may get lucky!

Thanks again for the replies and straight forward answers!

**breathemusic** · 04-12-2012, 11:40 AM

Just be careful about the terms of any card offering a 0% balance. If you transfer the highest card to a new 0% card and then just concentrate on paying toward the other cards, once the intro period is over, there's a possibility the CC could back-charge you interest for those intro months. So depending on the terms of the card, you might want to only tranfer to a new card what you know you can pay off before the 0% period ends (I think I saw someone vaguely mention this before). Just be careful to read the fine print before you get a new card. And even if you do tranfer money, you can still ask to get the rate lowered on the cards that you'll still have money on. Worst they can do is say no. Best case, you get a lower rate AND you move some money to a new card with a 0% rate.

Asking for lower interest rates...did it work?