Many people who owe credit card debt have cards with very high interest rates. The average interest rate for credit cards is 21%. For those consumers who are only able to pay the minimum monthly payments - that’s a lot of money going towards interest! With a lower interest rate, you could save thousands
If your goal is to continue making monthly payments directly to your creditors, you may want to contact your creditors to see if they will reduce your interest rate. If you are able to, for example, get a card that is at 24% down to 18% - you will save you thousands over the life of the debt – if you are paying minimum payments only.
If you overall goal is to resolve your debt through settlements and Ugotiate, there is little to no benefit in requesting a reduction in your interest rates – your goal will be to negotiate to pay less than the total balance once you have funds available to settle – regardless of your interest rate.
Some hints if you do want to request a reduced interest rate from your creditors: In most cases, it doesn’t hurt to just ask! Make the call to your credit card companies and ask them for a lower rate. The credit card companies are more likely to reduce your rate if you have a good credit rating and if you do not have a high debt-to-income ratio. They are also more likely to say ‘yes’ to requests to reduce your rate is you do not carry a high balance on your cards, if you do not just send in just the minimum monthly payment and if you have an excellent payment record. If you don’t have great credit and you are carrying a high balance, it may be more challenging to secure a rate reduction. That doesn’t mean you shouldn’t ask. If the representative that you are working with can’t lower your rate, ask to speak with manager - they may have more pull and you can plead your case with them.
You can also ask for any specific “hardship programs” that are available to card-members. These programs typically offer a reduced payment amount and a low interest rate for a period of time - usually 6 or 12 months - to help card-members get back on track. If the credit card company won’t lower your interest rate permanently, maybe they will on a temporary basis and then you can try to renew the program again when it ends in 6-12 months.
Making the call to your credit card companies is definitely worth a try! And if you are successful, you will end up saving lots of money over the life of your debt.
If the credit card companies won’t budge to reduce your rate, you may want to review other debt relief options. Ugotiate can help you compare the options available to you