Today’s personal finance tip is about requesting your credit card company for a lower interest rate.

We’ve covered three negotiation tactics when it comes to getting the interest rate lowered on your outstanding credit card dues, such as:

Of course, these tactics should be up your sleeves if credit card companies refuse to lower your interest rate after a simple request to do so (which works in most cases). Today we share our last negotiation tactic.

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Explain your inclination to pay back your credit card debt and that a lower interest rate will prevent you from defaulting.

Credit card companies do not appreciate any kind of default on their debt because they lose a lot of money. Of course, they run a business on lending money and the longer it takes for consumers to repay their debt, the more money credit card companies get owed (i.e. more revenues and hence, profits). However, there needs to be a possibility of actually receiving that money from credit card consumers for the business model to work and if there is a chance of default, credit card companies will begin to lose sleep.

According to the Federal Reserve, default on loans are something financial companies have had to battled for decades, and as a consumer with credit card debt, you can use this vulnerability in the business model of credit card companies as a bargaining tool. You may call up the manager and politely explain that you are fully interested in repaying the debt, but the chances of default are pretty high if the interest rate on your outstanding dues is not lowered. Chances are, your request will be complied with.

These aren’t the only negotiation tips you can use to lower the interest rate on your credit card debt. As a financially savvy consumer who is interested in quickly repaying credit card debt, you can do a bit of surfing on the internet and quickly come across a number of other tips online, which may work on their own or in combination with the above.

However, you should be aware there are plenty of scams that promise to lower the credit card interest rate for you (Source: Federal Trade Commission). Never give out personal credit card information on an inbound call, regardless of whether they ask for a fee of their service or not, and promptly report the scammer to the relevant government department.

If all this fails, hope is still not lost because you may still be able to transfer your credit card balance to a zero-rate credit card. We’ll talk about that in our next article, so see you soon!