Credit Card Interest Rates: Tips for Lowering Your Rate

Do You Have Credit Card Debt Settlement That You Can't Get Out Of?

Does it feel that no matter how diligently you pay your credit card bills each month, your debt never seems to go down?

The key reason for this is the interest rate at which you are borrowing. Interest rates on credit cards are quite high.

According to the Federal Reserve, the average claim rate on a credit card is 13.8%, while the average interest rate on a mortgage is 3.80 percent.

If you are only making the minimum payment on your credit card debt settlement, the vast bulk of your charge will be applied to the interest rate alone.

In fact, by March 2019, Americans will have spent $110 billion on interest and fees associated with credit card debt settlement.

In order to get out of credit card debt settlement, interest costs are your number one adversary to contend with.

The good news is that there is a technique to get your interest rate down, and it is easy enough that anyone can accomplish it.

If your monthly payments are only barely covering your interest costs, contact your provider and request a lower interest rate.

The worst they can say is that they cannot help you. However, there is a potential that you may receive a YES and that your interest rates will be reduced.

CreditCards.com conducted a study in 2017 and found that 69 percent of respondents who requested a reduced interest rate were granted one.

On top of that, 84% of those who inquired obtained a higher credit limit as a result of their request.

Another 84 percent of those who were late on their payments had their fees waived. In addition, 70 percent of those who inquired were successful in having their yearly charge waived or lowered.

The fact that so few people do it is one of the reasons why it is so successful.

According to Creditcard.com, just one in every four consumers has ever requested a reduced interest rate from their credit provider.

Many people believe that asking is not an option–that is, they do not believe they have the right to ask–while others believe they do not know how to ask or negotiate.

We will show you four effective methods for requesting a reduced interest rate that are both effective and efficient:

What Factors Make You Eligible For A Reduced Interest Rate?

When you submit your request, the following factors are taken into consideration by your credit card company:

How long have you had your card, and how loyal are you? Do you utilize it on a regular basis? Your corporate loyalty and frequent usage of your credit card provide you a significant advantage over the competition. Credit card firms place a high value on recurring clients since it costs them a lot of money to acquire new consumers. The company is more than prepared to lower your fee if it means keeping a long-term customer happy.

Depending on how much you've spent so far, your credit card company may decide to lower your interest rate since they believe you've spent less than 35 percent of your credit limit. They will also check your credit limit on other cards, as well as how much money you have spent on them in the past. The same 35 percent guideline applies here as well.

Finally, the credit card firm wants to know how many times you've been late on a payment in the last year. If you pay on time your bills every time, you have more bargaining power.

If you believe you are eligible for a lower interest rate, phone the lender. Even if you do not meet the requirements, phoning gets you on their radar anyway.

Customer service representatives frequently inform consumers that they should contact back after a few more months of continuous payments.

However, before making a decision, conduct some preliminary study. Investigate the interest rates that other firms are willing to provide to someone with your credit score.

As you'll see in our script below, you may utilize this knowledge to your advantage when negotiating a better bargain.

Begin with the oldest card in your collection. Loyalty pays off, so start with the card that you've been using the most frequently.

Call the customer support phone number that is printed on the back of your credit card.

Explain to the customer support representative that you'd want to get your interest rate lowered and identify yourself.

If you've been a customer for a long time, now is the moment to express your gratitude.

Also, note that you are usually on time with your payments or that you have a good credit card score.

Here's An Example Of A Script You May Use

Hello there, my name is _________ . (After exchanging greetings.) I'd want to speak with someone about my current interest rate with the bank. For the last ________ years, I've been a faithful consumer of the Company's name. And I'd like to continue to be one, but my APR is too high. For example, I receive offers from–insert name of competitor company–, and they offer a cheaper APR to people with my credit score. I make purchases with this card on a regular basis and pay the bill on time each month. I feel I am eligible for a lower interest rate than I am currently paying. Whom should I contact in order to obtain one?

Either the customer support representative will take care of your request or will send you to a supervisor.

If they agree to cut your interest rate, express your gratitude and ask for the specifics of your new interest rate. Inquire as to whether the increased rate will take effect immediately.

And make it clear that the new rate is your annual percentage rate (APR) going forward, not merely a promotional deal that will expire after a certain period of time.

The Ability To Persevere Is Essential

What happens if they say no? Please call again.

The person who answers the phone is frequently the difference between a yes and a no.

If the first representative you talk with tells you no, call back.

This time around, you might be able to speak with someone who is more receptive.

Upon hearing "no" for the second time, request to speak with a supervisor.

If they also decline, you might inquire as to what you can do to put yourself in a better position to receive a rate decrease.

They could impose certain limitations and/or ask you to call back in a few months, but this is a step in the right direction.

How many times are you allowed to call? There are no restrictions.

However, once every six months–or until you receive a yes–is OK.

If you make an excessive number of phone calls, you may be placed on a blacklist. After you've received your first rate reduction, you might want to wait a year before requesting another.

As a firm that deals directly with clients, Alleviate Financial Solutions has a duty to deliver the finest services available in a professional way. This standard is created from the very first time we talk with a client and continues throughout the relationship. Professionally written letters, financial plans, debt settlement methods, and reports help us to maintain our high levels of service while being accountable to our clients.

🎧 Podcast: https://pod.co/podcastlive/how-to-release-an-irs-wage-garnishment-and-work-with-debt-settlement-companies

Settle Your Debt on Your Own versus Using a Pro

If you have too broad a debt than you can manage and are struggling and overwrought out to pay your creditors back, there is help.

A decision that many people take is the lengthy path of “just surviving,” having nothing in savings and barely scraping by to create ends meet.

The trouble with this choice is that when one bump in the road arises, such as a surprising medical bill, job loss, or financial shift, then filing bankruptcy is gazing you in the face.

However, living paycheck to paycheck is like residence on the advantage of a financial calamity.

In fact, you may exactly be in one as you read this.

So, what should you do if you desire to get out of debt when you owe crushing amounts of money?

Most people don’t realize the alternative of resolving their debts which is better than filing bankruptcy.

Yet even then, most people are not completely educated on how to settle debts on their own or the benefits of keeping a professional debt settlement business to take care of it all for them.

Here are the distinctions between how to settle your debt on your own verse utilizing a professional.

Steps To Assistance You Settle Debts On Your Own

1. Keep track and understand your debt amount: It is crucial to know exactly how great you owe creditors, including the claim rates and overall debt amount. If you do not understand this, then it will be tough to negotiate with creditors.

2. Arrange with the creditors: Once you have your total debts and interest rates in order, the next step is to phone up your creditors and have a talk. Just be honest and explain your circumstance to them. They should see the hardship you are facing and figure out a strategy for you to pay your bills back. Negotiation is the most significant component of the debt settlement procedure because it will decide the amount you will payback.

3. Payback approach: You must have a payback strategy and if you would rather pay back your loans in increments or all at once. Depending on what you arrange, you may be able to decide on which possibilities are ideal for you. After all, if you file bankruptcy, then the creditors will not gain from any negotiation.

If you cannot avoid the desire to spend when you see money in your hand, create a bank account only for settlement purposes.

4. Get it in writing: Before you settle for anything, create sure to get it in writing. Some creditors may try to smuggle in other clauses in an agreement given to you. So, make sure anything you are reading is the same as what is settled upon in your conversation.

5. Make the amounts on time: It is vital to always create your payments on time. If you don’t, that may put the arrangement you negotiated with your creditors in peril. Hence, make sure you take the procedures necessary to back your debts as agreed upon.

Paying Back With The Help of Professionals

Now that you understand how to clear your debts DIY way.

What are the benefits of keeping a team of certified debt professionals working to settle your debts for you?

The key benefits you have when you choose to go with debt specialists are:

• Higher debt reductions

• Faster settlements

• Not having to worry or deal with irate creditors.

Here is how you have professional assistance you clear your debts:

Plan a free debt consultation with a team of debt experts.

It will take some time for the company’s staff to verify your paperwork and see the payments you have due.

You should also open an account to deposit the cash agreed upon to satisfy your debts until they are totally addressed. Once this is set, they will subsequently meet the creditors.

Typically, when a team of debt professionals agrees to take you on, they usually settle your debts between 24-28 months and decrease your debts as high as 40-50 percent.

They also do not charge a fee till the first settlement occurs. Any organization that asks for money up ahead is not a company you want to work with to have settled your debts.

When you remain with the program and are faithful in making your payments, you will then be debt-free and can start restoring your credit.

Conclusion

Hiring a team of experienced debt experts to settle your debt for you is always an easy technique because they normally handle everything for you.

The debt specialists will send veterans in who can optimize results in minimizing the loan payback amount for you.

However, it is always best for you to examine both possibilities, and if you are feeling like facing the creditor giants, get at it!

Alleviate Financial Solutions is a leading supplier of best-in-class performance-based consumer debt-relief services. Throughout our company, we are devoted to giving the best customer service possible. All facets of our program, from our performance-based fee structure and account management tools to our industry-leading service area, are created with our customers in mind. Each client's financial condition is taken into consideration when developing our plans, and we monitor their progress on a regular basis to ensure they are meeting our high standards. We have high expectations for ourselves and our service, and we won't stop working until we've paid off all of our clients' debts.

🎧 Podcast: https://pod.co/podcastlive/how-to-release-an-irs-wage-garnishment-and-work-with-debt-settlement-companies

What Are the Cons and Pros of Debt Consolidation

Do you find yourself in a condition of financial trouble due to consumer debt? You are not alone in your feelings. In accord withto the New York Federal Reserve, American consumers would be saddled with a total of $14.35 trillion in consumer debt by the third quarter of 2020.

If you are falling back on your credit card payments, then you could consider debt consolidation. Let’s go on to analyze the positives and disadvantages of debt consolidation to see if this is the right choice for you.

What Is Debt Consolidation, and How Does It Work?

Debt consolidation is the process of grouping all of your debts together into a single, manageable payment with a single interest rate. This means that all of your credit card payments, mortgage payments, vehicle loan payments, and student loan payments are now merged into a single payment.

As you can see, this option can be very enticing to folks who are becoming behind on their payments, especially considering the interest rate is reduced. Let’s glimpse at some of the positives and disadvantages of debt consolidation plan below.

The Advantages and Disadvantages of Debt Consolidation

Everyone has heard the adage "if anything sounds too good to be true," which suggests that it most likely is. It’s the same way with debt consolidation.

Even if it is a great remedy for people suffering from too much debt, there are both positives and cons to this debt consolidation plan. Let's delve a little deeper.

Pro Tip #1 You will benefit from a lower interest rate.

If you have a great credit score, you will nearly always be able to qualify for a reduced interest rate, which is a considerable advantage. This implies that you pay a single sum into your loan every month, and the interest rate on your loan is reduced.

For illustration, if you owe $9000 on your credit card and your interest rate is 25 percent, you will wind up paying $2500 in interest over the course of two years if you pay $500 per month toward the amount.

With a debt consolidation method, you will pay $820 in interest at a 17 percent interest rate, as well as $445 in loan repayments per month, for a total of $1,080.

Due to the decreased interest rate, the amount you pay each month decreases, as can be seen in the table above. This is only applicable if you are able to secure the reduced interest rate.

Pro Tip #2: You will be able to simplify your finances.

In the case of a debt consolidation plan, you can greatly simplify your financial situation by having only one repayment plan, one amount to pay every month, and only one interest rate to worry about.

If you've ever had a lot of different loans and had to keep track of all of their payments, due dates, and interest rates, you'll understand how much of a bother and worry it can be to keep track of everything. No one has the luxury of time for that!

In addition, because your payment amount is the same every month, you know exactly how much money you need to set aside each month for savings. Also consider how much money you have available for discretionary spending.

Pro Tip #3: You will be able to pay off your debt sooner.

Usually, with debt consolidation plans, you may pay off your debt sooner, because you can acquire a reduced interest rate on all your consumer debt. Beginning and end dates are clearly marked on the consolidation loan contract.

You may pay it off using credit card installments during the course of your lifetime. There is no time limit in this situation. As long as you are only making the bare minimum payments on your credit card debt, you could be stuck with it until you die.

This is not the case with consolidation loans. This is why they are such an excellent alternative for anyone who wants to have more control over their finances and enhance their financial skills.

Pro Tip #4: You have the capacity to increase your credit score.

You can pay off your debt preferably with a debt consolidation loan. This has a beneficial impact on your credit score. Additionally, if you are punctual in making your loan payments on time each month, this will help to improve your credit score.

With consolidation loans, you are obligated to make all of your monthly payments on schedule. That is a rule that cannot be broken.

As settlement history accounts for 35 percent of your credit score, a debt consolidation plan helps you increase your credit score little by little every month.

Additionally, accounts owing account for 30 percent of your credit score, which will be considerably improved if you close down your credit card and loan accounts when you combine them all into a single debt consolidation plan.

Pro Tip #5: It is achievable that you will not be able to obtain a lower interest rate.

As previously noted, having a decent credit score is essential in order to qualify for a lower interest cost on your debt consolidation plan.

Having problems completing your loan payments on time, it is conceivable that you do not keep a strong credit score to begin with. Ascertain whether a debt consolidation program is a good fit for you by speaking with a debt consolidation company representative.

The second disadvantage is that this could be a band-aid solution to your impulsive spending habits.

If you are having issues paying off your debts, either as a result of poor spending habits or as a result of a tough time restricting your expenditures, a debt consolidation plan will merely function as a bandage for the larger problem.

It’s wonderful for you to acquire a debt consolidation plan, but only if you work upon your financial habits alongside the repayment plan. They should be in harmony with one another.

Gather with others who are on the same path as you, potentially through social media, and get serious about building healthy money habits!

In this manner, you may pass on these principles to your children as well, ensuring that they do not become locked in the cycle of poor financial management.

Inconveniently, there are up-front fees to worry about.

There are certain upfront charges that you will have to account for when signing up for a debt consolidation plan. Loan origination costs, balance transfer fees, closing costs, and annual fees are examples of fees that may be charged.

If you do not keep the financial capacity to handle all of these charges, a debt consolidation plan may not be the ideal option for you. The best line of action, once again, would be to contact an agency that can oblige you in selecting the best course of action.

Financial Independence Is Within Your Reach – With a Little Hard Work

Now that you know the positives and drawbacks of debt consolidation, you can make a more sensible judgment on whether this choice is for you or not.

If you are still perplexed, please contact Alleviate Financial Solutions right away for assistance. They have supported over 20,000 families on their journey to financial freedom, and they can assist you as well!

🎧 Podcast: https://pod.co/podcastlive/how-to-release-an-irs-wage-garnishment-and-work-with-debt-settlement-companies