How can I get my APR reduced on my credit card?

Question

I have a credit card that is maxed out and since I didnt have a job for a while last year, I was late for a couple months on the credit card. They change my APR from 14% to 28%!!! There is no way to get my balance down because the balance is so high....are there any options to get it lowered?

I tried calling the customer service number and they told me I would need to talk to a personal banker (since my credit card is through a bank) and see if they could reduce it. I dont know what else to do!!! Just from being late 3 times, noone will give me credit and there is no way to pay down on this...help!!

Does anyone know goodwebsites to go to about this?

Thanks!!

Wow, these are some great answers! The card was actually used for school tuition since I wasn't eligible for grants and I didn't have a job because I was finishing my last semester of school and my full time job was to demanding for my full time school. I know how to manage money, I know I signed up for this so I am not trying to not accept responsibility. BUT if there is any way to help my situation, then I will try. I love when people make assumptions about others...Madison.

Answer 1

Talk to someone at the bank and ask them to lower your APR. DON'T THINK THAT YOU CAN'T GET YOUR BALANCE DOWN!!! Anything beyond the minimum payment should help you reduce your balance. Pay as much as you can to the debt AS SOON AS YOU CAN so that your "average daily balance" (what they compute interest on) is lower. Stop eating out (if you currently are.... fast food can add up almost as quickly as eating at a restaurant or getting take-out), drink tap water instead of ordering a soda if you do go out to eat (it's free and filtered... and has 0 calories).

If you explain your situation (unemployment, but you're back on your feet now), they may be able to help... otherwise, try this:

(1) Gather all the preapproved offers you've received in the mail. (When you call your companies to ask for a break, you need to be able to tell them who's offering you a better deal and how much better it is.)

(2) Have a rough idea of how valuable a customer you've been: how long you have had the card, how much you charge a month or year, how much interest they're earning each year on your business, and whether you pay on time. When you've got it together, you can proceed.

Call the toll-free customer service number and ask or a lower rate... calling and asking for a lower rate results in a reduction 56% of the time -- and a substantial reduction (1/3 of their current rate) at that. Here's a script to follow when you call. Begin with:

"I have [name of card] with you and my interest rate is [X] percent. I received another offer in the mail from [other bank's name] for [X] percent, but before I take it, I want to see if you can lower my interest rate instead."

If the representative says they're not authorized to do that, you say:

"Look, you and I both know that if I transfer my balance today, next week your bank is going to send me an offer to come back at an even lower rate. Why don't you just save the bank the cost of that effort by giving me several points today?"

If the rep says it's not possible because your credit card is at a fixed interest rate, you say:

"Actually, that doesn't have anything to do with whether or not you have the ability to lower my interest rate. A fixed interest rate only means that my rate doesn't very with fluctuations in the prime rate. In fact, the bank can raise it on my account at any time by just giving me 15 days' written notice. And the bank can -- if it chooses -- lower the rate today."

If the rep still says they're not authorized to do that, you say:

"I'd like to speak to your supervisor."

Speak to a supervisor and ask again. Even if you get a substantial cut in the interest rate from the first person, it's worth speaking to a supervisor to see if you can do any better. The person on the front line of customer service will be authorized only to cut your rate by a preset amount (if at all). The customer service representative may also insist that the supervisor doesn't have the power to cut your rate either, or -- if you've already gotten a break -- to cut it further. That may not be true, so insist on speaking to the supervisor anyway.

Threaten to close your account. Let me be clear here: You don't WANT to close your account. It won't do good things to your credit score. However, if the bank believes that you're willing to close your account -- and you've been a profitable customer -- then you stand a better chance of getting what you want.
Keep a record of whom you spoke to and what was said. If your promised rate cut -- or fee waiver -- doesn't materialize, then you're going to need a paper trail to back up your story. Knowing to whom you spoke, when the call was placed and what was promised is key.

Transfer your balance. If you're not successful in reducing your interest rate over the phone, it's time to transfer your balance. There are two places to find good balance transfer offers: your mailbox (the average person gets five credit card solicitations a month) and at websites, including bankrate.com and cardweb.com.

Or you can just pay on time and wait for the delinquent APR to subside and your regular APR to take hold again.

Answer 2

Here's what you do:

Make THREE ON TIME payments in a row. Pay more than the minimum amount due.

After the third payment has been received, call the customer service number and ask for a lower APR.

If they give you the runaround, politely ask to speak to a supervisor. Ask again. Tell the supervisor how you have made three on time payments, ans ask them to review their history to confirm. Be sure to mention you are trying to improve your credit history, how you were unemployed last year, and stabilize your balance.

It has also happened that a credit card has a condition where once you default on payment a certain number of times you are automatically assigned a permanent fixed APR of 22% or so. If that is the case, bite the bullet and just pay for six months ON TIME. This should get your credit history back into a good enough state that you can call citi or Discover or Chase or whomever and ask for a deal on balance transfers and transfer all of your balance to this new card. Be sure that it is a fixed APR for the life of the balance. Otherwise you'll just get killed again when the intro offer expires.

Lessons:

NEVER be late on a credit card payment. NEVER. If you have to make a choice on whether to be late on a credit card or a phone bill, pay the credit card first. Your phone bill will not get higher if you are a week late.

Keep a cash reserve of at least one month worth of living expenses.

Make two lists. One with essential expenses (grocery, rent, car payment, etc), the other with luxuries (dinners out, movies, gym membership, cable) The essentials are the things that you cannot function without, bills that need to be paid. The rest are things that are not essential. When something happens and you find yourself in a bind, you kill off the things that are on the luxuries list, and that frees up money to continue making bills should the emergency last for more than one month.

In the future, if you become unemployed, call your credit card company and let them know, see if you can do something to protect your credit (and your APR). That way it's not that you simply forgot, but you have a valid life changing event that needs to be discussed with your creditors.

Answer 3

Don't take Madison (answer above) too much to heart -- I've seen him on here and he seems to write mean things to everyone. Regarding your problem, it seems like you might have to take the high APR. It was part of your card agreement that they would raise your APR if you had late payments, and since it was three payments that you missed and not just one, you don't really have a leg to stand on with the company. I understand that you turned to the credit card since you didn't have a job, but that obviously wasn't your best option. There is a way to pay down on this -- if you thought there wasn't, you wouldn't have kept charging in the first place.

Try calling the card company and explain to them that you understand you brought the APR on yourself by missing payments, but that your priority now is paying it down and you're finding it difficult with the APR. Tell them you've learned from the mistake and you want to rectify the situation and bring your balance down. Ask them if you can work out an agreement where they lower your APR a little bit for every couple of payments that you make on time, in an effort to make progress on getting the balance down. Say, they lower it a few percentage points for every 3 or 4 payments you make on time. Likely your company is going to be willing to work with you to help, because they want you to pay it off too, but you have to accept that missing payments doesn't allow you to have the lowest interest rate. That's something that you have to earn.

Missing credit card payments is a big deal, and missing three shows other credit companies that you're a risk. You're going to have to rebuild your credit by continuing to make on-time payments, even if it's just the minimum. On-time payments are the key to good credit, more so than having no debt (though that's important too). For the future, stop using the card. I am trying to pay down a balance from a semester of tuition (originally was $2K) and I haven't used the card in almost 2 or 3 years and the balance is nearly gone. Figure out a savings plan, like putting 10% of every check in your savings account, so that you have some sort of back-up in case you ever are unemployed again. It will help immensely. Good luck.

Answer 4

If they refuse to lower your rate, after you told them you would get another credit card and transfer your entire balance to the new card, then you need to either get a loan, since you can not qualify for another card. The last resort is to see a credit council service. They will work out a deal to reduce the interest. You must surrender the card to them. They charge a small (couple of dollars) few per month to handle the payments. It is almost like bankruptcy and is a last resort, but it will work.

Answer 5

Do you get as many "Pre-Approved" credit card offers in the mail as I do? Pick 2 or 3 of the best offers this month and have them in you hand when you call your current card's customer service number. Tell them to convince you NOT to accept one of the offers you have in your hand. If they won't reduce your rate, follow though on the treat.