How to Ask for an Interest Rate Deduction from a Creditor in Five Steps

Owen E. Richason IV reports:

"If you like your creditor but your small business has a line of credit or company credit card with a high interest rate and you know lower rates are available, you will probably consider asking for an interest rate reduction. But before you do, there are some important factors to consider. Mortgage lender Mike Clover of CreditScoreQuick.com cautions that such a request may actually have the opposite effect, triggering a rate increase and reduction of credit limit. So make sure the request is done right and with other options in mind...Perform a due diligence search for other rate offers. BCSAlliance.com, a credit and debt reduction service, recommends visiting the websites of other credit card providers or line of credit providers and recording their interest rates and introductory offers. You want to ascertain what rates are available and what the offers entail. You will use this information as a bargaining tool when requesting your interest rate reduction...Write a request for an interest rate reduction. Credit card expert Leslie McFadden of Bankrate.com states that you must have a reason for wanting a lower interest rate, such as being unable to make the minimum payment or having to choose which credit account gets paid and which does not. Write the request with this in mind...Format the letter to include your name, address and account number. State in the letter you are requesting an interest rate reduction for the following reasons and be specific. Include competitor offers with lower rates, your creditor's own new introductory rates, and state your timely payment history and length of time you've had the account. Close the letter by asking your creditor to lower your rate and to answer in writing...Phone the credit company to follow up. Allow 10 business days to elapse before doing so. By this time, you may receive a written response to your interest rate reduction request. If you have not received a reply in writing, phone the credit company and ask to speak with a supervisor or manager. Explain you have sent a written request and inquire what response is likely. If the credit company's representative states your request is likely to be denied, make a formal request to her over the phone...Exercise your options. If your request is denied, you may elect to close your account and switch to another credit company with a lower interest rate. Be prepared to state this to your current credit company and see if it causes the company to lower your rate...Closing your credit account can have a negative impact on your credit score, particularly if you've held the account for a long period of time, as this effectively shortens your credit history and negates timely payment reporting."