How to Close Credit Cards for Better Rates

Getting a better deal on your credit card's interest rate is often easier said than done. Credit card companies have become increasingly more resistant to lowering rates and instead have initiated rate increases across the board for many customers. If your credit card rates have recently been increased or if you just want a better deal on your debt, you may be able to get better rates by closing your credit card accounts.

Instructions

1

Make a list of all your creditors, including the account number, the amount due, and the current interest rate. If your credit card company has sent you a statement notifying you that your rate will be increasing, or if any of your accounts are past due, make note of that as well.

2

Using your credit report, check the account history for each credit card you have. Have you always paid on time or have there been late payments? How old are the accounts that you have? The history each account has will determine what approach to use in getting your rate lowered. Keep in mind that if your credit is relatively good, closing your credit card accounts could negatively affect your score.

3

Compare your balance transfer options. If you have several offers for balance transfers at much lower rates than what you're paying now, transfer the debt to another account for a lower rate. Once the debt is transferred to the new lower rate card, you can contact your credit card company and close the account. Ask to speak to someone in charge of closing accounts and advise them you want to close your account because the interest rate is too high. If you've been a good customer and have always paid on time, the company may be willing to negotiate a lower rate to keep your account open.

4

If your account is past due, contact your credit card company and ask if they would be willing to lower your interest rate in exchange for not closing your account. Explain to the company representative why a lower interest rate would benefit both you and the credit card company and that you're making a good faith effort to resolve the debt. If you're experiencing financial hardship, you may need to provide documentation supporting your claim, such as an unemployment claim or proof of public assistance.

5

If your account is in good standing but your credit card company has notified you that a rate increase is coming, contact the creditor to find out why. If the rate increase is due to the economic environment, an increase in operating costs, or anything not related to your credit profile, you can dispute the increase and have them recheck your credit. If they refuse to lower your rate, you can then opt out of the rate increase by closing your account and paying off the debt at the old rate.