4 tips on reducing interest rate on your credit card

Published on December 1st, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Believe it or not, you can negotiate your way into getting a better interest rate on your credit card. An interest rate can have a huge effect on how much you will be paying on your card, and being able to reduce these numbers will make you a happier swiper. We have put together four tips on getting the best deal for you.

Cash in on the interest free period

When you take out a credit card you get an interest free period. This will be the opportune time to cash in on lowering your interest rate. Credit cost Australians $16 million in interest a day, with as much as $50.9 billion that is being owed. You could do this by paying off your debt every month. Couple this with new lifestyle changes in your budget will see you benefit in the long run. If you only use your credit card in times of need, than wants, you will reap the rewards. When purchasing wants try to use cash or a debit card. Being able to physically see all the money you have worked so hard for diminish is a quick motivator curbing unnecessary spending.

Don’t compromise, but compare

Sometimes we are pushed in financial situations that require immediate action. This could make you a bulging eye shopper who is looking for their next credit card pronto. This is a bad move. Even if the pressure is on, it’s advisable to speak to a lender and then compare. If your current lender is not giving you a competitive rate after you have asked them too, then you can threaten to leave. There are plenty of other institutions who want to sign up new customers with good interest rates. There are plenty of financial providers that offer top of the range comparisons, so you don’t have to worry. They compare the best deals for you in terms of interest rate and what is suitable to your budget. Want to get the best deal on your credit card? Contact an accredited financial lender today.

Learn the art of negotiating

According to a survey from Credit Cards.com, 78% of people who asked to have their interest rates reduced succeeded. A shocker is that only 1 in 5 attempted to ask. When it comes to your money there is no need to feel intimidated on how you protect and grow it. The basics of negotiating the best interest rate won’t need you to be a charismatic speaker who will have your lender eating out of the palm of your hand. Ok maybe this skill would help, but it will be pointless if you don’t have it backed up by research and reasons why it should be reduced. Be persistent and for the love of mini bagels don’t be rude.

It truly boils down to budget

You could get the best interest rate on your credit card, but if you are not good at managing your day to day finances it will be meaningless. Don’t underestimate the power of budgeting when it comes to saving. You will be shocked at just how much money you were throwing away with little purchases. You can start off by creating a list of what you consider to be needs and wants. Go through your bank statement and look at the purchases you could do without for the following month. One of the major expenses is food. Look at what you can cut out.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

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