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How to Get Lower Interest Rates on Credit Cards
Lower interest rates are what allows you to pay less in finance
charges and, as a result allows your credit card balances to
drop more quickly. Just a few percentage points reduction in
your interest rates can make a huge difference in your ability
to pay off your credit cards.
When you ask your credit card issuers for an interest rate
reduction, you have to show why you deserve a lower rate. If you
are experiencing difficulty with paying more than your monthly
minimums, then your creditors will not be willing to provide a
lower interest rate. They may even raise your interest rate if
they feel that you represent a higher risk of default.
You can take action now to protect yourself.
How We Request a Lower Interest Rate
When we ask your creditors for lower interest rates, we present
them with a structured repayment plan (known as a
management plan) that discloses permissible reasons for lower
interest rates according to their guidelines. Our proposal
includes debt totals, the number of included accounts and a
comprehensive household budget.
Your creditors will be able to see the need for benefits, and
will generally grant you full benefits once they determine that
you qualify. The primary purpose of our counseling session is to
see what options are available for you, including repayment on
your own through strategies that we can recommend. This list of
options may vary depending on your financial situation.
If your accredited financial counselor determines that you
likely qualify for benefits, then you may be able to find relief
through lower interest rates. Lower interest rates are one of
the main benefits of enrolling in a debt management plan.
One advantage of using a debt management plan is that once your
creditors grant a lower interest rate, your rate is locked in
for the duration of the program. In other words, even if the
prime rate increases, your rate stays the same. Your rate will
not go up as long as you continue making consistent payments
through the program.
Lowering Finance Charges
Getting a lower interest rate allows you to sharply reduce
the amount of finance charges that you are incurring on each
account. In addition, the portion of your minimum payment that
goes to finance charges shrinks, so that you can focus more on
paying toward the actual principal balance.
A debt management plan can allow you to pay less in interest
and apply more toward the principal balance. Some creditors
offer substantial interest rate reductions. This offers the
possibility of paying off the balances far quicker while making
lower minimum payments
at the same time.