Banks today are at your mercy if you can play them against each other properly. With 0% balance transfer offers still lingering and easy access to credit for many people paying ANY interest except on a mortgage can prove to be a huge waste of money.

I am currently carrying about $16k of credit card debt and 100% of that debt is at 0%. I won't pay a dime of interest for any of that money, some of which will have been borrowed for over 3 years before it's all paid back. It wasn't always "free" money for me. I had terrible credit and over time improved my situation.

There are a two things that must first be in place before you can expect to get your credit card rate lowered.

First, you have to have decent credit. If you don't have at least decent credit the card issuer surely knows that you won't do much better anywhere else and has no incentive to give you a lower rate. There are several articles on helium that offer up advice on how to improve your credit.

Second, you have to have an alternative. Again - without a viable alternative to move your money around the card issuer will have no incentive to help you out. Go ahead and apply for one credit card, making sure it has a lower interest rate - preferably with a 0% balance transfer option. When you receive that card it's time to make the call.

Once you have these two things in place you're ready to go. Call up the current issuer and simply say that you would like to have your rate reduced. Do not give them the rate that you want. In a typical negotiation whoever spits out the first number usually loses. Say you're at 19% and you haven't missed any payments on anything (not just your current card). The new card you got in step 2 above has offered you a rate of 14.5%. When you ask, the current issuer agrees to lower the rate to 16%. That's when you pull out your trump card and state that you are getting 14.5% from Bank X. Explain that if they want the balance to remain on that card they will have to at least match the rate. If they don't agree then call back the next day. Still a no? Call back again. Sooner or later you may end up with a CSR who will lower your rate. After 5 or 6 tries and no luck then it's time to transfer the balance.

Now, if you were offered the 0% in the 2nd step then fiscal responsibility dictates that you transfer the balance immediately! Just don't go and charge against any of your newfound credit. Unless you are a savvy financier, creating more debt will NEVER help you regardless of the interest rate.

Having access to other credit is your most powerful tool when negotiating lower rates. The key here is to avoid creating new debt just because you have more credit available to you. It takes only a little bit of discipline and a lot of persistence to get your financial affairs in order so that you're no longer concerned with interest rates.

Learn more about this author, Brian Lardin.
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