Credit Cards

Millions of people are drowning in an ocean of credit card debt at high interest rates while interest rates generally are at historic lows.

Banks are reaping enormous profits from the interest on consumer credit cards. People who make minimum payments at the higher rates can take 25 to 50 years to pay off their balances.  It’s time to lower the rates and stop drowning.

How To Get Better Rates

Get out your credit card statements. Look for the APR, or Annual Percentage Rate. It will be somewhere on each statement. Make a list of the cards, the rates and the phone numbers to call for service.

Don’t call the companies yet. Go online and look up each company to find out what interest rate they are offering to new customers. Now, compare those rates with what you are being charged.

Banks offer tiered interest rates, with lower rates for better credit ratings. The tiers are for higher to lower credit scores. They are Super Prime, 760-850; Prime, 660-759; SubPrime, 500-659. The rates are lowest for the highest credit scores.

There are also higher rates for below average credit worthy customers and for people who have late or missed payments or who have exceeded their credit limit. To find the current rates go online to Write down the average rates.

Get Your Credit Reports

If you know your credit score, good. Compare it to the rates published at bankrate. To find your credit reports  go to and get your report from each of the three national reporting companies. You can get these at no cost once each year.

It’s Time To Negotiate

Call each credit card company and ask them to verify your current rate. Next, ask for a better rate. They will usually ask you to wait so that they can look up your payment history, credit information, and consult their internal guideline. Some will immediately lower the rate.

If your request is refused, ask to speak to a supervisor. With that person, explain what you know about your credit worthiness and payment history and why you deserve a lower rate. If that is refused ask for the floor manager. Repeat the process.

Do this with each credit card company. They lower rates for their customers regularly – but not unless the customer asks for a lower rate. You are not alone in wanting to lower your payment and balance.

Credit is tighter today than it was formerly. It pays to be persistent and to call more than once and at different times of day. You will be dealing with humans and some will be more accomodating than others, even at the same company with the same rules.

If persistence doesn’t work, ask the company about their forebearance or debt management plans. The credit card companies know that millions of people are in tough financial straits. 

If a company goes over your situation and finds that you have suffered a financial hardship such as unemployment or underemployment, they can restructure your payment plan, lower your interest rate to zero, waive penalties, forego over the limit fees, etc.

Forebearance and debt management plans will be covered in more detail in Managing Credit.

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