Lowering Interest Rates to Save Money
Even if you’re in good financial standing with good credit, you could be losing money because of high APR interest rates—particularly on high-interest, unsecured credit cards. Whether your finances are sound or you’re just breaking even, there is never a time when having a lower interest rate isn’t a good idea. You can use the extra money to build your savings, make investments and put towards major life events like buying a new home or car, or taking a vacation.
How do I lower interest rates on my accounts?
You can usually get your interest rates lowered on current accounts if you have a solid payment history with no missed or late payments. You call your creditor or credit card company and ask them about getting a lower interest rate on your account. Have your payment history and account information on hand and be firm in your negotiation tactics:
- Never ask what they are willing to give you
- Provide a realistic number and stick to your position
- Share goals with your creditor as to why a lower interest rate would benefit you—building credit, paying off debt by a specified date, upcoming big purchases/expenses
- Be persistent—if the first call doesn’t get the result you want, call again and try speaking with a different representative or going through the system online
With enough data to back up your position and a good effort you can negotiate for lower interest rates successfully.
What if I can’t get a lower interest rate?
If a particular company won’t budge on a high interest rate, don’t use that credit card for purchases unless you can pay off the full balance when the bill comes due. All your credit cards can buy things you need, but credit cards with lower interest rates mean your purchases cost less if you are unable to pay off the balance quickly.
Always try to use your lowest interest rate credit card for purchases. Once you’ve built up a positive credit history and increased your credit score, go back to the high interest creditor and try again for a lower interest rate.
How do I prevent my new, lower interest rates from increasing?
Once you have successfully managed to get an interest rate lowered you don’t want it to increase again. It’s vital to pay at least the minimum required monthly payment on time each month—if possible, pay more than the minimum amount. Also, try not to reach the maximum limit on your credit cards, as this can cause rate increases if the company doesn’t see progress in paying it down.
What if I don’t qualify for a lower interest rate on any of my accounts?
If you can’t get any of your interest rates lowered there may be an issue with your credit score. It’s critical to check your credit report once a year to ensure accurate information. Your accounts could be incorrect or you could be subject to identity theft if someone has gotten your information.
If the information is accurate and your credit rating is actually a problem you may need to speak with a trained credit counsellor for other solutions. They may enroll you in a debt management program which will help fix your credit and help you to put your finances back on track. Call 1-800-656-3920 for a free debt consultation or fill out the online form at consolidatedcredit.ca and a credit counsellor will call you shortly.
| Cutting Car Costs | |
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People pay a tremendous amount of money for a new vehicle and consumers are stretching out their loans to an average of over 62 months – just over five years. Over that 5-year period finance charges can be astronomical. This booklet reviews how consumers can save money when buying a car and details what common mistakes to avoid. |
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