How to negotiate credit card interest and improve your financial management

Most people have little idea how to trade credit card interest and even less about how to improve your financial management. However, good financial management is an important tool to guarantee anyone's financial future.

According to experts, it is possible to get better interest rates on your credit card as long as you know the basics of negotiation. In this article, we will give you some tips on how you can negotiate better interest rates on your credit card and, simultaneously, improve your financial management. Follow!

Why are credit card interest rates so high?

Credit card interest tends to be high due to a number of factors. First, there is a high risk associated with granting credit, as banks have no guarantees that borrowers will, in fact, pay their debts.

Interest, therefore, serves as an “insurance fee” to compensate banks for lending money to unsecured individuals and also represents a way of compensating for the high risk associated with the loan.

Furthermore, banks want to maximize their profits; Therefore, they charge high fees and interest to obtain a higher return on your loan. This practice also makes it possible to cover expenses related to granting credit, such as disclosure of marketing information, approval processes, among others.

Finally, competition between different credit card providers can also contribute to higher interest charges. As providers compete to provide the best interest rates and bonus offers, the interest rate for credit card debt will also increase.

Why Many People Are Having Problems With Credit Card Interest

Many people are having problems with credit card interest due to the high cost of debt. The average revolving cost, which is the interest rate charged on purchases made in installments and not paid at the end of the month, is around 25%.

This means that if you buy something and don't pay it off in the same month, you end up paying interest at a rate that tends to be higher than a car or home loan. Additionally, many credit card companies also charge annual fees, service fees, and customer service fees, increasing the costs involved.

These differential costs make it difficult to maintain on-time payments and can often send people into a debt spiral that is difficult to pay off. Furthermore, interest rates are often high due to unfair and abusive practices on the part of credit card services.

Step by step to negotiate credit card interest and increase your financial confidence

To help you achieve a new financial reality and with a good credit card, we have prepared a detailed step-by-step guide to negotiating your credit card interest rates.

1. Evaluate your budget

Before contacting the financial institution that issued your credit card, evaluate your budget to get a clear picture of how much of your finances can be allocated to paying off your outstanding balance.

2. Contact the bank or issuer

Call your credit card issuer's customer service department or billing department and ask to negotiate your interest rate.

3. Explain your financial situation

Make it clear to your issuer, honestly and sincerely, the real financial situation in which you find yourself. If you are experiencing financial difficulties, explain to them the reasons for this.

4. Ask to check your payment history

Show your bank or credit card issuer that you intend to honor your financial obligations. Ask them to check your payment history so they can see that you are a trustworthy customer.

5. Offer a payment plan

Propose a payment plan that is most viable for your finances. For example, ask the issuer to divide the outstanding balance into installments with a stipulated payment period.

6. Take advantage of promotional offers

If the bank or issuer has any promotional offers such as special discounts for cash payments, take advantage and make the most of these offers as they can help you ease your financial passengers.

7. Negotiate lower interest rates

Expresses your intention to negotiate lower interest rates with the bank. Ask them to analyze all the additional costs and fees you have to pay to determine if it would be possible to lower the interest rates.

8. Control your finances

Control your expenses and follow a series of responsible finance principles to increase your financial provision. Banks and credit card issuers will certainly reduce your interest if you claim and show that you are responsible with your money.

How to make your credit card a great ally in personal finances

1. Use your credit card responsibly. Never buy things you can't afford. If you use your credit card and don't pay the entire bill by the end of the month, you will be subject to high fees and interest that can accrue.

2. Use your credit limit wisely. If your credit limit is lower, you will have more control over your purchases. If your credit limit is too high, you're likely to go over the limit and have to pay high fees and interest.

3. Always pay minimum amounts or above minimum amounts. If you're having trouble paying the entire bill, never pay just the minimum amount. Pay at least a little above the minimum amount so you don't have to pay interest throughout the month.

4. Look for discounts and rewards. There are many credit card options with discounts, bonuses and rewards that can offer substantial savings when using your credit card responsibly.

5. Keep your payment history clean. Always make payments on time to maintain your good credit score. This can also influence your credit card interest rate.

6. Review your budget periodically. If you're having trouble paying your bills, write down your expenses and be aware of what kinds of things you're buying with your credit card. This way, you will have more control over your expenses.