What's the best way to renegotiate the interest rate on your credit card?

PamelaQ1888

I've been with Capital One for 3 or 4 years now. I started off with a credit limit of £200 and a high interest rate as my credit rating was poor, I think it might have been billed as a credit building card, or similar. Over those 3 or 4 years I used the card regularly paying off the balance on time each month. I also sorted out all my debts. My credit rating gradually went up. Capital One offered me a new limit of £700 which I accepted. I kept using the card regularly and paying off the balance on time. They are now offering me a limit of £1700. I don't need to accept it, but I might, as I guess it would be good to have it there in case of emergencies. But I would like to ask them for a better interest rate. What's the best way to go about it? Do you simply ask for it? Or do you compile a case for it then present them with it?

SuperAllyB

If you're paying off the balance on time every month, why does the interest rate matter?

Brie

I would think your only option would be to apply for a different card. 

cymruchris

The way I found to reduce interest rates was to apply for different cards. The companies themselves are rarely interested in reducing rates on existing products. My first credit card was along a similar vein - credit limit £200  with an eye-watering interest rate. That was a few years ago, and now have available credit across cards of £40k and rates as low as 15% (I'm pre-approved for a couple of 12% ones as well, but haven't gone down that route yet).

Keep a check on what cards you're pre-approved for - use eligibility checkers direct on lenders websites - and see what's offered. It's likely you won't get the 'typical rate' that you see on screen if you have a limited credit history - but it's likely with a mainstream card you'll get a better deal than Cap one. Try Virgin on their website - they offered me a decent deal at a decent APR when others will still quoting high.

Then over time - rinse and repeat every 6-12 months - until you get down to a reasonable APR.

Keep your original Capital One card open - but just use it for one purchase a month to keep it alive. Longer established credit accounts have a positive impact on your history.

(And although it shouldn't matter if you pay off in full - as I do - there might come a time when you have a genuine emergency and need to let a balance carry for a few months - to which I'd rather be paying 12-15% than 30-50%! So your question is a very valid one)

paul_c123

Best way is to apply for another card. It could be a 2nd card with the same provider (often their 2nd card deals are much better than the existing?!!?!), or if you're more confident, a broader market search. There's lots of comparison websites out there including MSE.

All the CC providers I know, have a policy of not being able to negotiate with a customer on interest rates and offers.

The third option is to phone up to close your account and see if they offer and retention offers - but you'd need to be okay with actually closing the account (because there might not be any and the telephone operative might just go "hang on........done!" (Its not too involved to close a CC account, and its a PITA to reopen it).

PamelaQ1888

SuperAllyB said:

If you're paying off the balance on time every month, why does the interest rate matter?

Thanks, Ally. I see what you mean, but I have had a couple of near misses. Also, if I did need to leave the balance, or part of it, for a bit, in an emergency...

PamelaQ1888

cymruchris said:

The way I found to reduce interest rates was to apply for different cards. The companies themselves are rarely interested in reducing rates on existing products. My first credit card was along a similar vein - credit limit £200  with an eye-watering interest rate. That was a few years ago, and now have available credit across cards of £40k and rates as low as 15% (I'm pre-approved for a couple of 12% ones as well, but haven't gone down that route yet).

Keep a check on what cards you're pre-approved for - use eligibility checkers direct on lenders websites - and see what's offered. It's likely you won't get the 'typical rate' that you see on screen if you have a limited credit history - but it's likely with a mainstream card you'll get a better deal than Cap one. Try Virgin on their website - they offered me a decent deal at a decent APR when others will still quoting high.

Then over time - rinse and repeat every 6-12 months - until you get down to a reasonable APR.

Keep your original Capital One card open - but just use it for one purchase a month to keep it alive. Longer established credit accounts have a positive impact on your history.

(And although it shouldn't matter if you pay off in full - as I do - there might come a time when you have a genuine emergency and need to let a balance carry for a few months - to which I'd rather be paying 12-15% than 30-50%! So your question is a very valid one)

Thanks for the thorough answer, Chris. I'll start checking it out.

PamelaQ1888

paul_c123 said:

Best way is to apply for another card. It could be a 2nd card with the same provider (often their 2nd card deals are much better than the existing?!!?!), or if you're more confident, a broader market search. There's lots of comparison websites out there including MSE.

All the CC providers I know, have a policy of not being able to negotiate with a customer on interest rates and offers.

The third option is to phone up to close your account and see if they offer and retention offers - but you'd need to be okay with actually closing the account (because there might not be any and the telephone operative might just go "hang on........done!" (Its not too involved to close a CC account, and its a PITA to reopen it).

Thanks, Paul. So I could ask Capital One for a 2nd card and maybe get a better rate on it? I did think of ringing them to close the account, the way I've done with broadband etc (and often stayed with them after being offered a better deal). As for them actually closing it hastily, I suppose they would be happy to re-open it, given that they're happy with me at the moment?                              If I did ask for a 2nd card do I say why, and tell them I'm after a better rate, or is it all down to their computer systems churning out rates - in other words is there no point stating my case etc?

cymruchris

PamelaQ1888 said:

paul_c123 said:

Best way is to apply for another card. It could be a 2nd card with the same provider (often their 2nd card deals are much better than the existing?!!?!), or if you're more confident, a broader market search. There's lots of comparison websites out there including MSE.

All the CC providers I know, have a policy of not being able to negotiate with a customer on interest rates and offers.

The third option is to phone up to close your account and see if they offer and retention offers - but you'd need to be okay with actually closing the account (because there might not be any and the telephone operative might just go "hang on........done!" (Its not too involved to close a CC account, and its a PITA to reopen it).

Thanks, Paul. So I could ask Capital One for a 2nd card and maybe get a better rate on it? I did think of ringing them to close the account, the way I've done with broadband etc (and often stayed with them after being offered a better deal). As for them actually closing it hastily, I suppose they would be happy to re-open it, given that they're happy with me at the moment?                              If I did ask for a 2nd card do I say why, and tell them I'm after a better rate, or is it all down to their computer systems churning out rates - in other words is there no point stating my case etc?

Capital One have various links to a number of cards - including the Post Office Credit card. You again can use their elgibility checker to see the likelihood of a card - but would try a few checkers across a number of providers before applying for just ONE card.

born_again

PamelaQ1888 said:

paul_c123 said:

Best way is to apply for another card. It could be a 2nd card with the same provider (often their 2nd card deals are much better than the existing?!!?!), or if you're more confident, a broader market search. There's lots of comparison websites out there including MSE.

All the CC providers I know, have a policy of not being able to negotiate with a customer on interest rates and offers.

The third option is to phone up to close your account and see if they offer and retention offers - but you'd need to be okay with actually closing the account (because there might not be any and the telephone operative might just go "hang on........done!" (Its not too involved to close a CC account, and its a PITA to reopen it).

Thanks, Paul. So I could ask Capital One for a 2nd card and maybe get a better rate on it? I did think of ringing them to close the account, the way I've done with broadband etc (and often stayed with them after being offered a better deal). As for them actually closing it hastily, I suppose they would be happy to re-open it, given that they're happy with me at the moment?                              If I did ask for a 2nd card do I say why, and tell them I'm after a better rate, or is it all down to their computer systems churning out rates - in other words is there no point stating my case etc?

It won't work with a CC like BB etc. Rates are set.
If you ask, they may think you are having financial issues, leading to reduced limits or closure of the account. 

MorningcoffeeIV

PamelaQ1888 said:

paul_c123 said:

Best way is to apply for another card. It could be a 2nd card with the same provider (often their 2nd card deals are much better than the existing?!!?!), or if you're more confident, a broader market search. There's lots of comparison websites out there including MSE.

All the CC providers I know, have a policy of not being able to negotiate with a customer on interest rates and offers.

The third option is to phone up to close your account and see if they offer and retention offers - but you'd need to be okay with actually closing the account (because there might not be any and the telephone operative might just go "hang on........done!" (Its not too involved to close a CC account, and its a PITA to reopen it).

As for them actually closing it hastily, I suppose they would be happy to re-open it, 

They wouldn't reopen.

You'd need to reapply.