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How to Get Lower Payments on Credit Cards

Kenneth Long
 


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Lower payments on credit cards can allow you to put more money toward your other bills. The problem is that since 2006, credit card minimum payments have actually increased, not decreased. In fact, many cardholders saw their minimum payments increase by 50%.

If you have a high interest rate on one or more of your credit cards, it can be costing you hundreds or thousands of dollars in interest a year. Such high finance charges can make debt repayment more difficult. It also increases the amount of your minimum payments, which in turn provides less for your other personal financial needs.

Ask for a Lower Interest Rate

If you have been current on your credit cards and can make extra payments, then you are in good position to ask for a lower interest rate. Making higher than minimum payments sounds like the opposite of what you are trying to accomplish, but it can show that you are financially strong and deserve a lower rate.

You can call your credit card company and threaten to transfer the balance unless they lower your interest rate. They do not want to lose valued business. They will frequently offer you a lower rate, which in turn will lower your minimum credit card payments.

Sometimes Card Issuers Say No

If you do not feel that you are a valued customer after the call, then you may need to try other options. This is an indication that the credit card issuer deems you to be a higher credit risk. They may honor future requests if you can overpay each month on your minimum credit card payments.

Many of us cannot overpay, which is why we are seeking lower minimum payments in the first place. One great personal finance tool is budget counseling through a credit counseling agency. They can help you discover sources of wasteful spending that could help you increase your credit card payments.

Another tool of credit counseling is helping you develop a debt management plan. This plan can help to structure your debt payments so that you can take advantage of benefits provided by participating creditors. In fact, most major credit card issuers are willing to lower your interest rate and provide a lower minimum payment when you commit to a debt management plan. Meeting with a credit counselor can help you improve your personal finances and better manage your debt through lower payments.

Kenneth Long began his public service with nonprofit organizations in 2001. He has since conducted workshops teaching other nonprofit executives how to integrate credit counseling with volunteer tax preparation programs. Long is a graduate of the University of North Carolina at Chapel Hill and received his Certificate in Nonprofit Management from Duke University.

You may find more information on lower minimum payments from Personal Financial Network.

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