Financial Empowerment

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Where You and Your Money Matter

Ask for a Lower Credit Card Interest Rate

Below are sample letters you can send to your credit card issuer asking for a lower credit card interest rate.These letters can be used for bank cards as well as store cards. If you don't want to send a letter,make a call and do not settle for the first customer service person who answers, ASK for a supervisor and then the supervisor's supervisor. In fact, there is no reason to send a letter unless you're ineffective in dealing directly with people over the phone or your request by phone was denied. Remain calm, an be nice, attitude is a turn off and you are dealing with a paid employee.

Threaten to Transfer Credit Card Balance to Another Credit Card

Dear Sir / Madam:

I have visited the websites of two of your competitors, _____ and ______. I noticed that both of these companies are offering credit cards with an 8.9% interest rate on purchases and balance transfers. I have attached copies of the information I found at their websites to this letter.

I am requesting that you reduce my current rate of ___% to ____% so that it is in line with what is available in the current market. I feel this is a fair rate since two major credit card issuers are offering it to new customers like me who have excellent credit ratings.

If you cannot offer me this rate, please advise me as soon as possible, as I plan to transfer my balance to one of these cards if you will not comply with my request.

When Phone Request for a Lower Credit Card Rate is Denied

Dear Sir / Madam:

I recently telephoned you to request a lower interest rate. The representative I talked to denied my request on the basis that I am offered the lowest available rate.

I am writing this letter to request a lower interest rate. I believe I deserve a lower rate on the basis that I have always been an excellent customer who has paid her bills on time. Will you please reconsider your original decision and lower my credit card interest rate?

Request They Match or Beat a Competitor's Credit Card Offer

Dear Sir / Madam:

I am writing this letter to request that you match or beat an offer I have received from another credit card company. Attached is a copy of the credit card offer I have recently received from ___________ Bank. I have circled in red the portions offering a ______ APR on balance transfers for the life of the balance transfer.

I believe I deserve a much lower rate than the _______% you are currently charging me. I have an excellent payment history with you. In addition, your rate is more than double the typical rate being charged by all the major credit card companies.

Please let me know of your decision as soon as possible. Thank you for your attention to this matter
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I have found this information n Bankrate.com

Requesting a lower interest rate

By Bankrate.com

A lower interest rate on your credit card account could be yours just for the asking.

That's right. In the competitive credit card industry, your card issuer wants to keep you, the existing, charging customer. Heck, you don't even have to have the best credit in the world. But you do have to request the lower rate.

The worst that could happen is that the company says "no." In that case, consider another card. Bankrate's search engine can help you locate card deals from issuers around the country. When you find one with a better rate, transfer the balance from your high-interest card and then cancel it.

Many card holders, however, are finding that their requests for lower rates are being approved by their exiting credit card issuers. So go ahead and ask!

The form letter below will help you request a lower interest rate (and the elimination of your annual fee, too) on your current credit card. Personalize it by entering your specifics in the areas in red. You can print out this Web page and make your changes by hand or copy the body of the letter and paste it into a document where you can make your changes on your PC.

If you prefer to see a .pdf version of the letter, click here. Or you can get it in .txt format by clicking here. (Copy the body of the letter and paste it into a document where you can make your changes on your PC.)

Date

Customer Service Department
Credit Card Company Name
Company's Address
City, State and Zip Code

Re: Request for lower interest rate on card name account number

Dear Sir or Madam:

I have been a credit card holder with your company for the last number years. My account is in good standing and I would like to continue using it. However, I would like you to consider giving me a lower interest rate on this account.

It has come to my attention that I am currently paying number percent on my name of card while many other issuers are charging their customers far less. Cite specific examples here (you probably get several in the mail each week), such as: I have I have received offers in the mail from your competitors who are offering with me a lower APR if I transfer my Visa account. XYZ MasterCard charges 5 percent, while ABC Visa is offering 4.8 percent.

I am also paying you a dollar amount fee each year to renew my card. I would like you to consider eliminating or reducing this fee. Again, if you have them, give specific competing examples: I have received offers from other companies with interest rates ranging from 0 percent to 2.9 percent for the first six months and no annual fee.

In this paragraph, list additional reasons why you deserve a lower interest rate. For example: I have paid my bills promptly, have never incurred late charges, and have never exceeded my credit limit. Obviously, only state what is true; your card issuer is well aware of your credit history with the company.

For these reasons, not the least of which is my number years as a loyal card name customer, I am requesting a lower interest rate and asking you to waive my renewal fee. If you cannot comply, I will be forced to cancel my card with your company and switch to a credit card company that can give me better terms.

Please have a representative of credit card issuer name contact me by phone at telephone number or by letter at the address below to notify me of how much you can lower my annual interest rate and whether my annual fee can be reduced or waived.

Thank you for your prompt attention to my requests.

Sincerely,
Your Signature
Your Typed Name
Address
City, State and Zip Code

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Sample Letter to Federal Reserve Board on Credit Card Practices

http://www.consumerlaw.org/initiatives/test_and_comm/031805_cc_samp_comm.shtml
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March 23, 2007 The Phoenix Business Journal.com phoenix.bizjournal.com

Credit card rules revised as Senate begins inquiry

The Business Journal of Phoenix - March 23, 2007
by Chris Casacchia
The Business Journal

Credit card companies are implementing major policy changes as consumer debt soars and Congress investigates the industry's lending practices.
JP Morgan Chase & Co. and Citigroup Inc. were the first to enact changes to their credit card business, just before a Senate investigations subcommittee began hearing testimony from consumers and industry leaders including Bank of America Card Services President Bruce Hammonds, Chase Bank USA Chief Executive Richard Srednicki and Citi Cards Chief Executive Vikram Ata.
The hearings, chaired by Sen. Carl Levin, D-Mich., are being led by a Democrat-controlled Congress that has placed many consumer issues at the forefront of its legislative agenda.
In January, Chase scrapped its two-cycle billing policy for calculating finance charges because "we heard our customers tell us that they found it to be confusing," said Paul Hartwick, spokesman for Chase Card Services.
Chase now uses an "average daily balance" method instead. The change reduces finance charges when consumers do not pay for a purchase in full. Two-cycle billing increases the interest charged to those with credit balances
The New York company also is providing free options to manage accounts through Chase Online, encouraging customers to use its alerts when a payment is due or when they have reached a designated credit limit.
In addition, Chase no longer will charge overlimit fees to customers who have been in a "chronic overlimit position" for more than 90 days.
"This past month, as we reviewed the account of a Chase customer who was testifying in a Senate hearing, we recognized that we should make a policy adjustment with regard to consecutive overlimit fees," Hartwick said.
That customer was Wes Wannemacher, who charged $3,200 on his credit card in 2001 and 2002 to pay for wedding expenses. Over the next six years, he paid about $6,300 toward that debt, but still owed $4,400 as of February. Chase wiped out that balance.
Wannemacher was hit with $4,900 in interest charges, $1,100 in late fees, and 47 overlimit fees totaling $1,500, despite going over his $3,000 credit limit by $200 on just three occasions.
On March 1, less than a week before the Senate hearings began, Citi Cards announced it was ending its universal default policy and its "any time for any reason" rate increases, which allowed the company to raise interest rates and change terms at will -- a common practice among card issuers.
Universal default automatically increases interest rates when the consumer fails to make a payment on another bill -- or if a rate goes up with another lender.
The changes are effective immediately for new customers and will go into effect for current customers by April.
John J. Fisher, senior vice president and director of business development for the Phoenix nonprofit Take Charge America Inc., said the biggest challenge for consumers is understanding policy language.
"While a simple explanation is generally what works best for consumers, it exposes creditors to legal risk -- particularly class-action lawsuits," he said. "This leads to incredibly complex documents that even a skilled lawyer will struggle to understand."
Later this year, Bank of America will provide lower rates if a customer has no late payments and does not exceed the credit limit for six consecutive months. The Charlotte, N.C.-based financial institution has never engaged in double-cycle billing or universal defaults, and examines two default events before considering default repricing, company officials said.
BofA, which counts MBNA under its umbrella, is the largest credit, debit and prepaid card issuer in the world, with more than 40 million U.S. accounts and $140 billion in outstanding balances.
"Obviously, pressure from Congress has stirred this change of heart," said Bill Hardekopf, chief executive of LowCards.com, based in Birmingham, Ala. "As soon as the Democrats took over, focus turned to the 'abusive' practices of the credit card industry. This is quite different from the blessing of the Republicans, who passed a bankruptcy law that protected lenders and made it much more difficult for borrowers to declare bankruptcy."
LowCards.com helps consumers compare credit cards in a variety of categories such as interest rates, rewards/rebates, and introductory rates.
Discover Financial Services LLC, which employs 2,800 at its Phoenix customer service center, released this statement: "We remain as committed today, as we were at our inception 20 years ago, to helping cardmembers use credit wisely. We do that by offering features to help our card members stay in control of their accounts, by designing products that meet their needs, by providing rewards programs that help make their money go further, and by being transparent in our practices."
Although card issuers are beginning to self-regulate business practices, some industry experts say legislation is imminent.
"There is increased probability that credit card lenders will face tighter regulations, including the possibility that they will face usury rate and fee caps and be barred from overly aggressive marketing tactics," said Brad Stroh, founder and co-chief executive of the free consumer portal Bills.com, which operates offices in Tempe and San Mateo, Calif.