Getting a lower interest rate

water1111 · #1 (**permalink**) 11-10-2006, 04:05 PM

Ok I am working hard at paying my credit card debt off and of course my interest rates are ridiculously high like 29% for a few of them and a couple are 21%. Here is my question. Once I am showing consistent payment history and the balalce is going down, will my interest rates go down or can I call up and ask CC's to lower my interest rates. How does this work? What are my chances of getting my interest rates lower or am I stuck with my high interest rates forever?

I love being on these boards and all this personal finance subject matter can become very addicting--

greedy4chips · #2 (**permalink**) 11-10-2006, 06:12 PM

Do you get offers for lower rate cards in the mail? If so use that as a negotiating tool with each of your cards. Any cards that do not lower your rate, transfer as much of the balance as you can.

The minimum payment on the 29% cards doesn't even cover the interest accumulated for the month!

How much do you owe on each?

What can you do to pay them off faster?

water1111 · #3 (**permalink**) 11-10-2006, 06:48 PM

Your right---the minimum payment doesn't even cover the interest....

Yes, I am doubling and tripling my payments each month trying to lower the debt.

I have a chase CC and it has a $5,000 limit and when I first started to pay it off, I was over limit by a couple of hundred of dollars..In the last 3 months, I've been paying it down and now my balance is $3,500. This card has a 29% interest rate.

I have a discover card and it has a $4000 credit limit. Also, I was over a few hundred dollars and now I have it down to $3,200. THis caRD is also 29% in interest........

My goal is to pay off or down to 30% of utilzation/

ren · #4 (**permalink**) 11-11-2006, 11:57 AM

First things first, I hope you've read Pay Off High Interest First. I disagree slightly with the article on one point -- the author says to pay only the minimum on all other cards than your highest interest card. Putting just a little bit more than minimum (just a few dollars will do it!) toward all other cards means those cards will report to the credit bureaus that you are paying more than the minimum payment, which will help your credit score.

Helping your credit score is critical, because when you call the CC companies to ask for your interest rate to be reduced, a higher score makes you a lower risk customer and therefore more likely to get a lower rate. Other than that, I think the article gives a fabulous blueprint for paying things off.

I am not sure if there's a calculator for this on site (if so, I apologize for the off site link!), but this debt snowball calculator may be very useful in helping you to prioritize which debt to direct the bulk of your money at. It also will help you figure out how soon you can be something even better than down to 30% of utilization -- debt free.

instantinfo4you · #5 (**permalink**) 12-05-2006, 12:27 PM

My advice would to be transfer both balance onto a 0% introductory rate offer card. You should get these all the time in the mail, then before your introductory rate expires, transfer you balances to another 0% or even 9.99% introductory rate card. If you do not get these offers in the mail, then google it. You will definitely find something. Even if you have to pay a $100 charge to transfer the balance, just think about all your saving in interest. Definitely well worth the effort. One word of advice though, be sure not to go past your introductory period, or you might have to pay compound interest for the whole period of 0%. Be sure to always read all the fine print before signing up for any new offers.