Re: Any tips on how to get a rate reduction from Chase and Discover
12-22-2008 03:02 PM
I would just ask nicely.
I would not give any signs that I am having trouble making payments. If your credit line is having the CL decreased as you pay down the balance, (chasing the balance), that could suggest that the company considers you somewhat of a risk. The CCC might consider giving you an interest rate reduction if it feels that it will motivate you to pay down the balance faster.
Key words to CSR: "You can see by my record that I have been paying down my balance". I would like to make even bigger payments. Is it possible to get an interest rate reduction so that more of the extra payments will help reduce the principle?"
You did say that you have reduced the balance already? Promise to reduce it much faster if you get some help with the interest rate. The answer will give you some insight about how the creditor views your account status.
Of course if you do get the reduction you should make the effort to make bigger payments. A few months later you can rinse and repeat.
"Notice how much I paid the balance down since my last interest rate reduction. I want to pay down the balance even faster. BTW, can you lower the interest rate even further?"
I call my plan "chasing the interest rate down" as they "chase the balance down". Actually Debt Management Companies get interest rates lowered by suggesting that company will get more of its money back by helping the consumer avoid complete default.
The idea I am proposing is basically doing the same thing. You simply are not admitting that you are in financial trouble, and you won't have your credit score trashed.
Banks are worried about defaults. Make them give you lower interest rates in exchange for your assurance that you will not default. That is why you should reward the act of lowering interest rates by raising your payments. It might be a little tough to do, but it should be very financially rewarding in the long run.
Other Key words: I really like your credit card and I would like to use it more frequently after I get the balance paid off and I start PIFing every month.
Be positive and avoid words like I will "try". If you have already reduced your balance. You have earned the right to say that you will do something and expect that they will believe. Stand on your record as you make future commitments. Then stand on that new record to gain more concessions.
Thanks, I gave it a try and Chase gave me the usual "we're sorry but that's the lowest we can offer, call back in a few months". Discover was more helpful, they lowered it from 16.99% to 14.99%. Not a whole lot but definately helpful.