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Can You Ask Your Credit Card To Lower Your Interest Rate?
If you think that the interest rate of your credit card must be reduced, dont just sit there and wait. Credit card companies wont volunteer to lower your rate if you wont ask them to. Surprisingly, a recent study reveals that 57% of credit card holders simply phoned in their requests and were granted a lower rate without any difficulty. So if you think youre a good candidate, pick up your phone and speak out.
Why Ask for a Lower Rate Lowering your interest by even just 10 points or less can bring huge savings to your budget. Just imagine bringing down your 19% interest to just 10%. Now certainly, that makes a big difference. Although it should be your goal to pay off your balances in full each month and avoid the interest altogether, there may be instances when you have to carry over your balance. Reducing your interest rate protects you from the risk of bad credit.
Are You a Good Candidate? Nevertheless, credit card companies wont just lower their rates for anyone. Are you a good candidate? First, check your credit report and gauge your credit rating. If youve been consistent in submitting your payments on time to all your creditors, you should have problem maintaining a high credit score. Paying off your monthly charges in full also makes you an ideal customer for creditors.
Your debt to income ratio may also be considered. How much do you spend each month and how does this compare to your earnings? Do you frequently carry a large amount of charges on your card? Do you often maximize your cards credit limit? Financial experts recommend not using more than 40% of your given credit. Using more than 505 or worse, exceeding your credit line would make you a high-risk borrower in the eyes of creditors.
Also, you need to consider the type of credit card you have. If youre using a secured credit card or a bad credit credit card, you may not be in the position to demand for reduced rates. Since youre regarded as a high-risk borrower, you cant expect your credit card company to reduce your rates just because you asked them to.
What to Say If you enjoy an excellent credit history, theres no reason why you shouldnt deserve a lower rate. The question is, what should you say to your credit card issuer? What points can you use to convince your credit card to reduce your costs?
One strategy is to research about the interest rates that other credit card companies offer. Based on your research, compare them with your credit cards rate and use this argument to request for a lower rate. You can also point out that youve been a long time customer (and a good payer at that!) and that youll like to stay within their company but that other credit cards seem to offer a better deal. Ask them if they could match that offer.
If the person you talked to insists that it is not in their power to make adjustments on fees, ask to speak with the supervisor. If your request is initially rejected, dont lose hope. Call again after a month or two and see if theyll be more agreeable to your request. While waiting, continue to improve your credit score and youll have better chances of getting a positive answer.
Applying for a Secured Loan 101
If youve made the decision to apply for a secured loan, youre likely to have done a bit of homework in regards of current interest rates, traditional fees for preparing the necessary documents, and of course, the fee your lender will charge you for your secured loan. If you have yet to accomplish the above tasks, you should at least begin the process before you begin to contact potential secured lenders. So heres a bit of basic info for you (and if youre already familiar with it, lets just consider it a refresher course, shall we?).
The most common type of secured loan is a mortgage; one of the largest bills that you will ever have in your life. There are a wide variety of fees in all shapes, sizes and colors for you to decipher through, so be sure to pack your x-ray goggles!
First things first, we have the APR its the amount that you will be paying each year for your loan. Also known as the Annual Percentage Rate, it will include the interest rate, fees, and certain other charges calculated on a yearly basis to come up with one complete percentage. Its usually a bit higher than the interest rate that youre quoted, as it includes the other fees.
Be sure that you know the terms for fees as many of them can be hidden or covered up as something else. Points are one of the more popular fees, and can range in purpose to get you a lower interest rate to an honest loan officer telling you thats how hell fill his paypacket. When in doubt, ask questions! If youre not happy with the answers you received, ask someone else. Ask all the way up to the president of the company, as this is your money were talking about here. And dont sign anything that youre not 100% sure about.
And last but not least, be sure to shop around- dont put all of your eggs into one proverbial basket, so to speak. There are, unfortunately quite a few bad loan originators (often referred to in the industry as predators) in the secured loan industry that are completing the old Bait and Switch routine on you- promising the moon and stars to you, their special client, but all the while they have no such program waiting for you (and you are now in a difficult position: either choose the horrid loan program that you got switched into, or no loan at all). By shopping around, and informing the competing lenders that they are not alone, you are setting yourself up for an ideal, winning secured loan situation.
When the application process commences, its very important to remember that you can change your mind at any time without penalty or fine. Sometimes our gut instinct tells us something that we just cant avoid, and its often best to listen to our gut