Lowering Your Interest Rate

Frequently Asked Questions About How to Apply Online for a Credit Card and Have the Interest Rate Lowered

There are always going to be questions that people have about the way that credit card companies conduct themselves. The credit card business is always going to be one that is bottom line orientated and unless you understand that a lot of actions that the company takes might seem to be very illogical and unfair. Indeed many people do think of credit card companies as greedy scum suckers and to a certain extent there is some truth to that statement. However, in our capitalist society there are many companies out there that are looking to protect their bottom line and regardless how you feel about it, it is very easy to see that credit card companies have the capitalist arts down to a science. Whether you are using the internet or paper to apply for credit cards you are always going to be subjected to the all powerful interest rate. In order to help people understand more about these interest rates this article will cover some of the most frequently asked questions about these infamous percentages.

Why Are Interest Rates So High For Credit Cards?

It is quite true that interest rates are very high for most credit cards. Good credit cards will have rates that are around 10% at the lowest usually and bad credit cards might have rates well over 20%. If you were an investor and you were able to guarantee yourself a return on investment of over 20% annually you would probably be a very happy person. Indeed most credit card companies are very happy at the profits they pull in every year but the higher interest rate is not there simply to increase their profits to larger amounts. This is part of their purpose but if you were to stop and consider the issue at a deeper level you would very likely reach the eventual conclusion that these rates also act as a risk management device. Risk is all over the place in financial transactions. Every time you apply online for a credit card you are taking a risk; every time you make a purchase with your credit card you are taking a risk. Even with good credit cards the risks are always going to be there and while you can easily figure out what your risks are it is much more difficult to figure out the risks that the credit card company takes. Consider the fact that before credit cards were around the most prevalent type of loan was the secured loan and secured loans require collateral. Many people are quite understandably nervous about signing an agreement that includes collateral (mortgage agreements notwithstanding) and because of that many people did not take out loans unless they felt it was an absolute emergency. When credit card companies came on the scene they were able to give out loans without collateral but in order for them to take on the higher risk of an unsecured loan they needed to get a higher reward and this more than anything else is the reason for the higher interest rates of most credit cards.

How Do I Lower My Current Interest Rates?

If you are currently interested in lowering the interest rates on your good credit cards and bad credit cards there are two primary things you need to do. The first thing you should try is to simply phone your credit card company and ask them directly. When dealing with a credit card company always make sure that you speak directly with their customer service because it can very quickly turn into a headache when you have someone aside from their customer service on the line and that person gives you an answer that later can not be confirmed with the customer service representatives. If that doesn’t work then you are going to have to get a bit heavy handed with them. Threaten to leave their company if they don’t give you the lower interest rate and if possible cite another credit card offer that has interested you. If they are stubbornly holding to that interest rate then it is time to start shopping around for real. Do not hesitate to switch credit cards if the other one gives you a lower rate; being able to let go is the hallmark of a savvy consumer.