SUGAR LAND, Texas – With the rate of inflation now the highest in 40 years, and the federal reserve expected to raise interest rates several times, financial experts say credit card interest rates are likely to rise as well.
As it stands right now, credit card holders are paying an average interest rate of 16.3%, according to Experian.
So what can you do about it?
Christine Nguyen is a hard-working wife and mother of five and the owner of The Sweet Boutique bakery in Sugar Land.
She specializes in making gorgeous, designer desserts and imaginative cakes.
But she says paying the huge, interest rates on all eleven of the different credit cards she uses is anything but a piece of cake!
“We’re a family of seven and we’re just a small business and we’re trying to make it every day and to have to pay this exorbitant amount of interest on a credit card, it just hurts,” said Nguyen.
Not only that, Nguyen and her husband have several cards with interest rates as high as 22.9% and they’ve racked up around $24,000 in credit card debt.
So, you can easily see why Christine wants and needs some help in reducing her credit card interest rates.
Luckily, according to a study by Bankrate.com, 78% of people who took the time to ask their credit card company for a lower interest rate, actually got one.
The problem is most credit card holders never make that call.
So now, with help from Richard Rosso, financial expert with RIA Advisors, we’re going to teach Christine three key steps to negotiate a lower interest rate with credit card companies.
Step One: Call your credit card company and make it known you’re a good customer.
”You need to ask them to look up your credit account history with the company and tell them, ‘I’ve never missed a payment. I’ve been with you for at least a year. And I rarely call in with any complaints’”, Rosso said.
Step Two: Make your pitch. Ask them to lower your interest rate.
Tell them you’ve looked at other, lower interest rate, credit cards at credit cards.com but you want to stay with them.
And remember to be nice, not demanding.
”What you don’t want is to come in and say lower it to this! do this! do that. You want to ask what can you do with me, as a long standing, good customer, to lower my interest rate”, Rosso said.
If that doesn’t work, you have one more play left.
Step Three: Ask for the retention department, which will indicate to them that you are ready to possibly leave them. That you mean business.
“Say to them, ‘can I speak to someone in your retention department?’ Say ‘listen, I may just have to investigate, and I hate to do that, but I may have to go investigate other offers and move my account to another credit card company. I really want to stay with you, but I need to lower this interest rate’”, Rosso said.
Finally, if you can’t lower your rate with your current credit card company, Ted Rossman with Bankrate.com has put together a list of five, incredibly low interest, credit cards you should look at that aren’t connected to any of the mega banks.
There’s the Navy Federal Platinum Card with an interest rate of 5.9%. to 18%, depending on your credit score.
The Trustmark Bank Visa Platinum Card at 6.15% to 11.15%.
The Lake Michigan Credit Union Prime Card at 6.25% to 14.25%.
The USAA Rate Advantage Visa Platinum at 6.9% to 23.9%
The First Technology Federal Credit Union Platinum at 6.99% to 18.00%.
Two of these cards are designed to help those who have or are currently serving in the military, but you don’t have to have served yourself, just having a relative who has served or is serving can be enough for you to qualify.
The two credit union cards listed above are an example of how local, community banks and credit unions may sometimes offer far lower interest rates on credit cards.
As Rossman puts it, “I don’t think many people realize how much they’re paying in interest and how much just shopping around could save them.”
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