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Credit Cards

Use 'leverage' to get your APR reduced

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Yes it is because many people don't realise the Banks and Credit Card companies are often open to negotiation.

So if you're currently borrowing money via your credit card why not call them to see if they would be prepared to reduce the interest rate. It won't take long and the worst they can say is 'No'.

The key 3 steps of this interest rate reduction strategy are -

  1. Find some leverage
  2. Call the Credit card company and ask them
All this should not take more than 20 minutes.
Find some leverage

Assume your current Credit Card is charging you 22.9% APR.

Surf the following Credit Card links to see what rates the competition are charging. Look for APRs that are around 25% - 50% less than you are currently being charged.

Try not to get too ambitious. You are going to be asking for a competitive interest rate reduction, one which both sides can be happy with, so it's unlikely that you'll be able to get the rate slashed dramatically. You must be prepared to accept a reasonable reduction rather than appear too greedy.

Your leverage should be something similar to this -

  • I've just received a mailshot from a competing firm offering me 16.9% interest for the next 12 months
  • However, I can't be bothered to go through the hassle of closing down my account with you, opening the new one and then transferring the balance
  • But I was wondering - can you match their deal or something like it otherwise I'll probably have to open the account with them as money is a bit tight at present
Don't give up

I would also advise that you don't give up if the first call wasn't a success -

  • If I spoke to somebody and they said 'no' I would thank them and hang up
  • I would then call again the following day using the same tactics
  • You won't speak with the same person and the next person might be more agreeable
  • I've seen persistence work well over the years

I would also advise that you call the following week if they refuse you on two successive occasions. And if that fails then give it a month. Remember - persistence.

Other tips that will help when speaking to them -

  • Be as polite and charming as possible
  • If you get aggressive and too forceful then you've probably got little chance
  • If you can try to make them laugh or smile - it can only help
Summary

In the UK, we often don't like to ask. But as the saying goes - if you don't ask you won't get.

You therefore have nothing to lose by following the above strategy. The worst they can say is 'No', but if you get a favourable result that could mean a considerable saving over the a year by having reduced interest costs.

Many people have used these interest rate reduction strategies over the years. If the situation is approached in the right way the chances of success are probably around 60%.

See also

    FREE Report

    How to Audit your Credit File

    With errors your rating will suffer
    How a clean credit rating can save you money
    4 steps to a clean up any mistakes
    Don't discount the importance of your credit file
    It's absolutely critical.....
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