Lower Your Credit Card Offers and Interest Rates

While you may think that everything is just fine with the credit card you have, you could be missing a really good opportunity when you throw away all those unsolicited offers for new cards.

Not that you should accept (or even open) all those offers you receive - you probably should not. But they can provide a good tool for some negotiations with your current credit card company if you would like to try to reduce the interest rate you pay.

Reducing the interest rate on your current credit card can be an excellent way to save money on your monthly payment for your charged purchases and any accumulated interest charges.

Ask For a Lower Interest Rate. Especially if you have a good relationship with your credit card company and your credit rating is good, you could well be able to simply ask for a lower interest rate. It may sound crazy, but it can sometimes be that easy and you won't know it won't work unless you at least give it a try.

Before you make the call to your current credit card company, however get yourself a little backup in case you need it. Open up one of those "pre-approved" credit card offers you received in the mail. Make sure it is one that is offering a lower interest rate than you are currently paying.

If your current credit card company is reluctant to lower the rate on your card, you should inform them of the offer from their rivals. Have the offer handy so that you can tell them exactly which company is offering this to you because they will no doubt ask you for those details.

Some card companies cannot actually reduce the rate on the specific card you have but they can issue another version of the card to you with the lower rate and transfer your balance for you. This seems like an extraneous step but saving several interest points on your credit card is worth it and the issuer is the one who has to do all the work anyway, so you may as well let them. Do make sure they close the first account when opening up the second though because having an open account with a zero balance can negatively affect your credit rating.

Weight All Terms and Conditions. Whenever you do compare new cards and lower rates to the card you currently have, you must make sure you see the entire picture before you make any decisions.

Some new cards do start with a very low interest rate but it is temporary. It is called an introductory rate and the fine print tells you that it goes up a few months after you get the card. Be sure you know what the final rate is that the new card will be.

Annual fees are applied to some credit cards as well. You should make sure that any card that offers a lower interest rate does not charge a larger annual fee than your current card. A large annual fee may negate the benefits you would reap from lower interest rates, especially if you do not always carry a balance on your card from month to month.

Department Store Credit. You cannot usually negotiate lower interest rates on department store cards like you can on credit cards. Not only that but department stores generally charge considerably higher interest rates than credit cards do.

If you are carrying debt on a department store card you may well want to consider paying it off with your credit card. You will save a lot of money by financing this with your lower interest rate credit card. You may well want to close the department store account unless you can limit your purchases to ones you will pay off by the end of each month in order to avoid high interest charges.

Considering Credit Card Change. The credit card you currently have may well be fine for you. It is a good idea to periodically review what you have with what is on offer out there however and ask for lower rates when you are in a position to do so. Or even think of a new credit card application. Lowering your interest rate on any balance you carry will give you an almost immediate savings.