Asking for a Lower Interest Rate? Beware!

If you are looking for a lower credit card interest rate, you might want to beware: Credit card issuers are becoming pickier about who gets credit — and even whether you get to keep the credit line you already have. Calling to ask for a lower credit card interest rate may draw their attention to you. Indeed, asking for a lower credit card interest rate may trigger what is known as a “credit review” by your issuer. MarketWatch points out some of the possible outcomes of a credit review:

The outcome could be a lower credit line, higher interest rate or closed account. These actions could ding your credit score, and that, in turn, may trigger higher interest rates on your other credit accounts.

Before you try for a lower credit card interest rate, you should first consider your position. Ask yourself these questions:

1. Do you have a good credit score? (This may means something that is at least 720.)
2. Have you made all your payments on time?
3. Have you had any credit issues in the recent past?

If you have a good credit score, pay on time and in full and have no recent credit issues, you might get that interest rate reduction without any harmful side effects. But if you have any issues, asking for an interest rate reduction may actually cause more problems than it solves.

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