When NOT to Ask Your Credit Card Company to Lower Your Rate

For years, our advice has been, “If your credit card rate is too high, call your issuer and ask them to lower it. Threaten to take your business elsewhere if they won't budge.”

How things change. You may want to think twice before picking up the phone and calling your card issuer today. Here are three situations to watch out for:

   1. You are maxxed out and your rates are decent. Don’t like that 15.9 percent interest rate? Unless you have plenty of open and available credit lines (and/or a strong credit score) and can really afford to take your business elsewhere, you may want to thank your lucky stars your rate isn't higher. Calling may trigger an account review which could result in a higher rate, or worse.

   2. Threatening to close your account when you don't mean it. In the past, if you paid your bills on time, issuers almost never wanted to lose your business. Now they may not mind. If you won’t lose sleep if your issuer calls your bluff and closes your account, go ahead and try it. Otherwise, realize you may just get what you ask for.

   3. You’ve lost your job. Asking your card issuer to give you a break because you just lost your job might result in them enrolling you in a hardship program where your interest rate drops to as low as zero percent for six months or so. But if they do lower your rate under a hardship program, your account will likely be closed to future activity. Or your issuer may decide instead to raise your rate, lower your credit limit, or even close your account. It’s hard to predict. If you are having trouble paying your bills, I would recommend that you first <a href="https://www.credit.com/ufg/credit.com/dcl">talk to a debt counselor</a>. 

While writing this post, I called up Scott Bilker, the expert on negotiating lower rates with credit card companies. (He wrote a terrific book, How to Talk Your Way out of Credit card Debt. I asked him if cardholders are still having luck negotiating lower rates. He said, "Absolutely. It happens every day."

But he also told me that if you're going to make the call, be sure you have other credit options available. That means holding onto the cards you do have, and keeping them active by using them from time to time.

He also added some perspective: "If your card company raises your rate dramatically, what do you have to lose by making that call?"

Have you called to ask for a lower credit card rate recently? What happened?

Gerri Detweiler – Personal finance author and Credit Advisor for Credit.com, Gerri contributes budgeting, debt recovery and savings information online. She is also the co-author of Reduce Debt, Reduce Stress: Real Life Solutions for Solving Your Credit Crisis.