How to Write a Letter to Reduce Credit Card Interest Rates

Credit cards can be extremely convenient when you need them, but they can also put you in a position where you are unable to make even the bare minimum payment each month on time. As your account balance increases, so does the amount of interest charged. You might find yourself in a bind before you know it. Fortunately, there is a way out of this situation. In many cases, if you write a letter to your credit card company and request a reduction in your credit card interest rates, your credit card company will work with you.

Sample Letters

Method 1 Requesting Hardship Relief

1. Make a list of all of the evidence of your hardship. Fortunately, most credit card companies offer hardship relief programmes to assist customers who are unable to make their monthly payments due to unforeseen circumstances. You must, however, be able to demonstrate what has occurred and how it has impacted your ability to pay your bills.

A note from your healthcare provider explaining the nature of your condition and how it has affected your income, for example, would be required if you had recently suffered a serious injury.

If you have recently lost your job or had your hours reduced due to no fault of your own, a letter from your employer (or former employer) would be sufficient proof of your employment.

2. Make a rough outline of your financial plan and expenses. In addition to demonstrating your financial hardship, it is beneficial to demonstrate to the credit card company that you are taking proactive steps to get your financial situation back on track. A household budget, as well as bank statements demonstrating your expenses, will demonstrate that you are doing everything you can.

In addition, your budget should demonstrate that you will be able to resume regular payments within a reasonable period of time – ideally, 4 to 6 months or less – if necessary.

Even if it is not possible for you to resume regular payments in the near future, you should submit additional documentation to demonstrate that your condition is permanent and there is nothing that can be done to improve it. Suppose you have a permanent disability that makes it impossible for you to work. Your credit card company may be willing to lower your interest rate permanently rather than only temporarily.

3. Format your letter in the manner of a formal business letter. On a computer, type your letter using a word processing application. A formal business letter template can be found in any of these apps, and they will format the letter for you. By using a template, you can be certain that you’ve followed the proper format and included all necessary information.

On the website of your credit card company, you can find the mailing address and department to which you must address your letter. In addition, your most recent credit card statement may contain this information.

Include the type of card you have, as well as your account number, in the subject line of your email. For example, “Sunshine Visa Platinum Acct. #1234567890102” might be written.

4. Describe the difficulty you are experiencing. In the first paragraph of your letter, briefly describe the situation that has brought you to the point of seeking assistance. Keep your description brief and to the point, and stick to the facts. If you’re including documentation, you can simply refer to it in your document.

As an illustration: “I’m writing to express my feelings after being involved in a car accident. As a result, I was admitted to the hospital and stayed there for several weeks. I am currently recuperating at home, but I am still in the process of recovering. My doctor believes that I will be able to return to work within two months of being hospitalised (see enclosed letter). In the meantime, I believe I would be able to continue making payments if my interest rate were to be lowered temporarily.”

5. Describe your reaction to your adversity in detail. It is unlikely that your credit card company will lower your interest rate simply because you have experienced a financial setback. You must also demonstrate that you have accepted responsibility for your financial situation and that you have made every effort to get your finances back on track.

As an illustration: “I’ve collaborated with my family to develop a new budget that reduces expenses as much as possible in order to make up for the loss of my income during this time. However, even with our tightened spending restrictions, we still don’t have enough money to cover all of our expenses. If my interest rate were to be reduced, I would be able to make my payments on time and avoid incurring late fees.”

6. Make a clear statement about what you expect from the credit card company. In most cases, hardship relief is only granted for a short period of time after the event. The final paragraph of your letter should describe the type of relief you are seeking and why you believe it will be beneficial to the company.

As an illustration: “In my opinion, lowering my interest rate from 18 percent to 9 percent for six months would allow me to continue to make the minimum payment on my credit card without difficulty. After six months, I should be able to return to the regular terms of my credit card agreement because I should have established financial stability.”

7. Include any supporting documentation you may have. Produce photocopies of the documents you have gathered to serve as evidence of your adversity and your response to it. Include copies of these documents with your letter. Make certain that you have adequately supported each and every statement of fact you made in your letter.

It is possible that your credit card company will contact you and request additional documentation before granting you any type of relief.

8. Consult with a non-profit credit counselling organisation. If you have a number of credit cards, you may require additional assistance. A non-profit credit counsellor can assist you in developing a budget and negotiating with your credit card companies in order to get you back on track more quickly.

If you have any doubts about whether or not a short-term hardship relief programme will actually help you, consult with a credit counsellor about more permanent options. Simply putting the problem off until later rather than dealing with it right away may result in larger and more serious problems down the road.

9. Certified mail is the best way to send your letter. Proofread your letter thoroughly before printing it, and then sign it in blue or black ink to indicate your approval. Copy the letter for your records and then send it to your credit card company via certified mail, with a request for a return receipt.

When you use certified mail, you will receive a card in the mail as confirmation that your letter has been received by the credit card company. It could take up to 2 weeks before you receive a response.

10. Customer service should be contacted. You may receive a phone call from customer service unless you specifically stated in your letter that you only wanted the credit card company to write it. Maintain communication with the credit card company. Do not ignore these calls, no matter how much you want to avoid them.

If you receive your credit card back in the mail and have not heard back from your credit card company after two weeks, contact the customer service number printed on the back of the card for assistance. Explain to the representative that you sent a letter requesting hardship relief, and that the letter has been accepted by the company. Inform them that you have not received a response and request that they direct you to someone who can assist you in resolving the situation.

Method 2 Seeking an Active Duty Adjustment

1. Collect the information for all of your credit cards in one place. Under the Servicemembers’ Civil Relief Act (SCRA), interest rates on credit cards are limited to a maximum of 6 percent per year. This debt ceiling may apply to any and all debts you incurred before you were called into active duty. In order to take advantage of this benefit, you must have the contact information for all of your credit cards and other consumer debts available.

This benefit is available to both new service members and reservists who have been activated. It may also apply to other members of the military in some instances. When in doubt about whether the SCRA applies to you, consult with someone in the administrative department on your base.

In addition, any service charges or other fees are covered by the ceiling.

2. Make copies of your orders as well as your income and expense statements. It is necessary to demonstrate, in addition to proving when and where you are on active duty, how being on active duty has affected your ability to make payments as previously agreed.

The credit card company will be able to tell exactly when you are on active duty if you have clear copies of your activation orders.

Earnings statements that show a decrease in income while you are on active duty, or that show a delay in the receipt of income, will demonstrate that you are unable to make payments as agreed while you are serving your country in the military.

3. Create a letter for each of your credit cards and print it out. It is necessary to send separate letters to each credit card company if you have more than one credit card. You can use the same letter and wording for all of them; just make sure that the addresses and account numbers that are referenced are different for each of them.

Most military bases have letter-writing templates that you can use to draught your correspondence. To find out more, check out the websites for your base and military division, or speak with someone in the administration department.

4. Certified mail is the best way to send your letter. You will have proof that your letter was received by the credit card company if you send it via certified mail. When you receive the card, you’ll be able to determine the date on which your letter was received. If you haven’t heard back from your credit card company by then, schedule a follow-up appointment for 2 weeks later on your calendar.

Even if you used a template, double-check your letter to ensure that all of the information is accurate before sending it out. Obtain a copy for your records and send the original to the credit card company after you have printed it and signed it in blue or black ink.

5. Prepare to present your case in court. Depending on whether or not your credit card company believes that being on active leave has an impact on your ability to pay, they may refuse to grant your request for a rate reduction. Providing specifics about your budget and expenses can assist you in overcoming this obstacle.

If you have dependents or any other situation that may affect your ability to pay, be sure to include that information as well in your application.

Method 3 Arguing You’re Entitled to a Lower Rate

1. Check the status of your credit report. Each year, you are entitled to one free credit report under the terms of the law. Signing up for a free credit monitoring service, such as Credit Karma or Credit Sesame, will also allow you to check your credit score for free.

As a general rule, if your credit score is good to excellent, you will have a better chance of convincing your credit card company to reduce your interest rate.

The likelihood of a rate reduction increases if your credit score has improved significantly since you first applied for the card. Consider the following scenario: if you opened a credit account six years ago when you had poor credit, the company is likely to have charged you the highest interest rate allowed by law. If you’ve improved your credit score by 200 points during that time period, you’re a good candidate for a rate reduction on your mortgage. You are no longer a risk to the credit card company in the same way that you were when you first opened the account.

2. Call the credit card company and ask them to look into your payment history. With several years of on-time payment history, your credit card company is more likely to negotiate a rate reduction for you with their company. In most cases, this indicates that you have never been late with a payment.

It also helps if you have been paying off your balance in full on a regular basis. If you have a balance on your account, it should be less than 30% of your total available credit limit, at the very least.

Even if you have made one or two late payments, you may still be eligible for an interest rate reduction if the instances were isolated and occurred months or even years before the current loan.

3. Examine offers from other credit card issuers to see what they have to offer. Credit card companies are in fact in competition with one another. If you are able to obtain a better rate from another company, your credit card company may be compelled to offer you a lower rate in order to retain your business.

Getting pre-approved offers in the mail can serve as a useful guide to the alternatives that are available to you.

If you’ve been turned down for pre-approved offers, you can still get pre-approved rates online from many major credit card companies without affecting your credit score or reputation. In most cases, pre-approved offers perform a “soft” rather than a “hard” pull on your credit report, so they have no effect on your credit score.

4. Find out what the prime rate is currently at. When setting credit card interest rates, the Federal Reserve typically uses the most recent federal prime rate reported by the Federal Reserve as a reference point. A rate adjustment may be available if the prime rate is lower than it was when your interest rate was first established.

Consider the following scenario: your credit card company sets your interest rate at prime plus 10.9 percent. Given that the prime rate was 9 percent when you opened your account, you had a 19.9 percent interest rate when you opened it. However, if the prime rate is currently at 5 percent, your rate should be 15.9 percent, not 5 percent.

Despite popular belief, the Federal Reserve does not “set” prime rates, as is commonly assumed. As a result, they are reported by the Federal Reserve as the prime rate that is posted by the vast majority of the largest 25 US banks, according to the Federal Reserve.

On the Federal Reserve’s website, at, you can find the most recent prime rate for the time being.

5. Before you do anything else, try contacting customer service. If you call instead of writing a letter, you will receive a more prompt response. You will also have a better chance of being heard as you age. If you simply mail a letter, it’s likely that you will not receive a reply.

You should prepare notes for yourself before calling, outlining the reasons you believe your interest rate should be lowered and why. Your positive payment history, high credit score, and length of time with the company should all be highlighted.

Inquire with a customer service representative to see if your interest rate is tied to the prime rate. If they claim that it is, inquire as to when it was last adjusted. Prepare by having the current prime rate on hand.

6. Make use of a formal business letter format. Make sure you type your letter so that it is taken seriously. A business letter template is available in all word processing applications. That way, you can be certain that your margins and spacing are correct. Select a readable font with a standard size of 12 point type.

Fill out the subject line of the letter with information about the type of card or account you have and your account number. In this case, “Moonlight Bank & Trust Rewards MasterCard, Account # 78987654321” would suffice.

7. Prepare a succinct letter stating your position. Keep your letter to one page in length. Starting with a concise statement stating that you would like your interest rate reduced, followed by the rate you desire. Explain to the credit card company in the following paragraph why you believe your interest rate should be reduced.

As an illustration: “I’m writing to express my dissatisfaction with the interest rate on my account, which I believe should be reduced from 19.9 percent to 15.9 percent. According to the terms of my credit card agreement, my interest rate is calculated using the current prime rate plus 10.9 percent. The prime rate, on the other hand, is currently 5 p “”Recently.”

You can also share specifics about your business relationship with the company in your opening statement. As an illustration: “I’ve had my card for six years and have never had a late payment on my account. During that time period, my credit score has increased by 156 points, which is significant. Because my interest rate was calculated based on a lower credit score, I believe I am entitled to a rate reduction from 22 percent to 18 percent as a result of the lower credit score “”18.5 percent of the population.”

It is acceptable to mention any offers from other credit card companies at the conclusion of your presentation. As an illustration: “Even though I’ve had a wonderful experience with Moonlight Bank and would prefer to continue doing business with them, Sunshine Savings & Loan has offered me a credit card with a higher limit and a permanent interest rate of 16.5 percent. It’s possible that I’ll have to consider moving on unless you’re willing to work with me on my interest rate.”

8. Certified mail is the best way to send your letter. As soon as you’ve proofread your letter, print it and sign it with a blue or black ink pen, depending on the style of letter. It is important to send it certified mail with a return receipt requested so that you will know when your letter has been received by the credit card company.

Before you mail your letter, make a copy for your records by printing it on plain paper. Keep the letter, as well as any other correspondence or statements from that credit card company, for future reference.

9. If you don’t receive a response, make a phone call to follow up. Mark the date on your calendar for two weeks after you receive the green card from the post office confirming that your letter was successfully delivered. If you have not received a response from the credit card company by that time, you should contact the customer service number on the back of your credit card.

Explain to the representative that you have sent a letter that you are aware has been received, but that you have not yet received a response to your letter from them. It’s possible that the representative will inquire as to what the letter is all about. Depending on your situation, they may be able to assist you or you may need to speak with their supervisor.

If you are unable to obtain the interest rate that you desire, you must decide whether you want to wait and try again in a few months or continue. If you receive a better offer from another credit card company, you may want to consider switching to that company. Keep in mind, however, that closing an account can have a negative impact on your credit score – especially if the account has been open and in good standing for a long period of time (such as several years).

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