1. Call the phone number on the back of your credit card.
2. Ask for a lower interest rate.
3. Get passed around to several different people. Ask each of them to lower your rate.
4. Tell them you have been a customer for a while, have a good history, but want a lower interest rate to match the offers you’ve gotten from other companies.
4. Get a lower interest rate. (If they do say no, call back in 15 minutes to get a different person, or call back in a month or two since the market might have changed)
5. Go through a few more minutes of them trying to get you to take cash advances for vacations or home remodeling. Say no. Keep saying no. Isn’t that partly what got us all into this economic mess in the first place?
6. Six months later…lather, rinse, repeat. Actually, given that any customer who is even paying their bill right now is a good customer, I might start calling more often.
By following the above steps, I’ve gradually lowered my interest rate from around 18.99% when I opened the account (in college with zero credit history) to 10.99% as of today. (So if I paid interest on a $1,000 balance, for example, that difference in interest rates would keep $80 extra from going out of my pocket and into theirs). They usually only lower it .5 to 1 point at a time, and a couple of times they said no, but that adds up over time. Plus, it just feels good to call a big company and get them to charge you less.
The average credit card interest rate is about 15%, so if yours is more than that, you should definitely call your company and shop around for other companies. It also helps to know what the current APR is (right now it’s 5%, a year ago is was 8.25%), especially if you have a variable rate on your card.
A related question: Why don’t I switch companies and try to get an even lower rate?
The result of paying on time every month, always paying more than the minimum and paying the balance in full when I didn’t go too crazy with my spending is that is that my credit limit has gone from $650 to $32,200 on that card in about 7 years. Granted, that’s absolutely and completely STUPID and I have no business with a credit limit like that (full disclosure: it’s more than I make in a year!), but it makes me feel like a high roller to have that credit limit so I don’t want to change companies since I suspect another company would not give me such a high limit. I won’t lie and say it’s not a good feeling to know I can pull out my shiny card and buy nearly anything I want with it. Macbook anyone? More importantly, having a high limit and enough sense not to spend that much means that my ratio of debt to available credit is low, which is a big factor in how your credit score is calculated.