Today’s personal finance hack is related cutting your outstanding credit card debt by highlighting your good financial behavior.

We’re currently covering a series of negotiating techniques you can use to lower the interest rate charged on your credit card debt. We started off by sharing the good news that in 75% of the cases, simply asking your credit card company to lower the rate will get the job done. However, in some cases, you may need to do a bit of negotiation to get the manager on your side. Our last post shared the tip of leveraging your loyalty towards the credit card company to lower the interest rate, and today we share the second tip.

Lower credit card interest rate, how to reduce interest rate on credit card debt

Are you a responsible credit card user? Use that as a bargaining tactic to get a lower interest rate on your card.

Negotiation Tip # 3 for lowering credit card interest rates on outstanding debt:
Highlight your responsible financial behavior when it comes to using credit cards.

If you have been responsibly using credit cards for a while now, you can ask the manager to take that into consideration when requesting a lower interest rate. As a practitioner of responsible finance, your user history would show that:

  • You have regularly paid your monthly credit card bills,
  • You have a good credit score and credit history, and,
  • You regularly make purchases through your credit card and do your best to avoid debt.

Note: For a bigger list of how to use credit cards responsibly, visit the Federal Trade Commission website.

If there have been specific transactions that were high value, bring them up during your conversation with the bank managers. Perhaps you went on a vacation or had to pay a particularly high medical bill because of which you were unable to clear your outstanding credit card dues and eventually landed in debt which has ballooned very quickly. Explain to your contact person your extenuating circumstances and that you request some leniency in the form of a lower interest rate, because you have been a good responsible customer in the past.

The next article talks about using a bit of market research about competing credit cards to bargain a lower interest rate on your current credit card debt.

Credit card debt, interest rate on credit card, track record of credit card use