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How To Get Lower Credit Card Rates

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Balance Transfers Offer Low Introductory Rates

How to Lower Your Credit Card Interest Rates

Transferring your credit card balance to another card is an option for those with solid credit scores. Many balance transfer cards come with a 0% introductory rate for 6-12 months, which can be a great tool to eliminate debt.

But there is a catch

That low rate is a ticking time bomb. Once the honeymoon phase is over, credit card companies will often slap you with rates well above average. There is also usually a transfer fee of 3% to 5%, meaning you would pay as much as $500 to put $10,000 in old debt onto a new card.

You will have to have a good-to-very-good credit score to qualify for one of these cards. Those without solid credit should look to debt management programs for relief.

The Effect Of Higher Credit Card Interest Rates On Borrowers Demand And Debt In The Uk

Borrowers categorized as subprime, or financially risky, are generally seen as heavily reliant on debt and, consequently, as vulnerable to interest rate increases. Researchers studied the effects of a credit card interest rate increase among low-income subprime borrowers in the UK to assess its impact on credit card demand, overall indebtedness, and borrowers ability to pay. They found that following the rate hike, subprime borrowers who appeared to be more financially stable reduced their demand for new credit by 42 percent more than their counterparts who did not receive the rate increase. Overall, borrowers did not reduce their indebtedness and incurred higher interest charges, resulting in higher revenues for the lender and a larger debt burden for borrowers.

Check Your Credit Score

Your credit score helps determine what kind of interest rates you qualify for. In general, the better your credit score, the lower your rate.

If youd like to get a lower interest rate, youll likely need good to excellent credit a good credit score is usually considered to be 700 or higher. This is why its a good idea to check your credit before making the request so you know where you stand.

Tip:

Learn More: How Personal Loans Impact Your Credit Score

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How To Lower Credit Card Interest Rates: 4 Options

7 Ways How To Get A Lower Credit Card Interest Rate Plus ...

There are a few possible ways to pay less interest on your credit card, such as asking your card issuer for a lower rate or consolidating your debt with a personal loan.

Edited byAshley HarrisonUpdated October 1, 2021

Our goal is to give you the tools and confidence you need to improve your finances. Although we receive compensation from our partner lenders, whom we will always identify, all opinions are our own. Credible Operations, Inc. NMLS # 1681276, is referred to here as “Credible.”

A high-interest credit card can be a major burden on your finances. The average credit card interest rate was 14.75% as of February 2021, according to the Federal Reserve which could translate into steep interest charges if you only pay the minimum payment each month.

However, there are ways to potentially lower your credit card interest rate, which could help you save money while paying off your balance.

Heres how to lower credit card your interest rate:

  • Take out a personal loan
  • Recommended Reading: How To Withdraw Cash From Credit Card Without Fees

    Moneygeeks Quick Guide To Low

    A low-interest-rate credit card is an excellent product to have in your wallet to give yourself spending flexibility. In addition, using your credit card responsibly and ensuring your statement is paid on time each month can quickly improve your credit score.

    However, just because a card has a low interest rate doesnt mean that any extra money out of your pocket is a good thing. When looking for a low-interest credit card, be sure to read the terms and conditions of each credit card carefully. If the card advertises an APR over 12%, that would be considered a high interest rate. Anything below 10% is regarded as a low-interest credit card.

    If you have a large purchase coming up, or revolving credit card debt, consider sitting down and running the numbers of how much interest you would accrue with a low-interest-rate credit card. Interest rates are important, but what youll spend in interest overall is just as crucial to consider.

    Here are a few benefits to having a low-interest credit card.

    Call Your Card Issuer And Ask

    One way to possibly get a lower credit card rate is to simply ask your credit card issuer for a reduction. Generally, credit card issuers are friendlier to these types of requests if you have good credit and are a good customer who pays your bills on time.

    When you make the call, a few points to mention include:

    • How long youve been with the company
    • Your history of on-time payments
    • Whether your credit score has gone up
    • Whether youve received better offers from other credit card companies

    Tip:

    Also keep in mind that your request might not be approved. If this happens, dont be discouraged ask what you need to do to lower your interest rate and when you can request a reduced rate again in the future.

    Check Out: How to Get Out of Credit Card Debt

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    Ask For A Lower Apr And You May Get One

    A lower APR is a request that many card issuers will grant to customers. CreditCards.com research released in March 2016 shows that while relatively few ask, more than 3 in 4 cardholders who ask for a lower interest rate get it.

    The first step is to make sure you know your own and , says Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. If youve been a good customer, be prepared to demonstrate that by laying out how long youve had the card, how much you charge each month and your history of timely payments.

    Its your money, and its worth fighting for, Cunningham said. I would definitely bother to make the call.

    For those who may be wondering what to say, heres an example of an effective conversation between a responsible credit card user and his or her card company.

    Check Your Credit Card Statements

    How to lower your credit card interest rate

    First, gather your together. It’s important to know your credit history, payment schedule, and other important details before calling your credit card company and asking for a reduced rate. Note your current interest rate so you can negotiate, and you may also want to compare your rate to that of average credit card rates to see where you stand.

    On the statement, you will see a customer service number. Call the number and key in the option to speak to an operator. The operator should be able to connect you with the correct person who can negotiate your rate.

    Although physically picking up the phone and calling your credit card company may seem like a time-consumingand potentially dauntingprocess, think of it this way: This phone call could potentially save you hundredsmaybe even thousandsof dollars on your credit card payments.

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    If Your Request Is Denied

    Just because you didnt receive a lower interest rate for the card you have, doesnt mean that you cant enjoy a lower rate. If you have already indicated that you were willing to bring your business to another card issuer with a lower interest rate, you can do so. The credit card industry is extremely competitive, and card issuers are eager for business. To find cards that offer the lowest standard interest rates, look for products that dont have a rewards program.

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    Another option is to open up a new account with a 0% APR promotional balance transfer offer. These offers allow cardholders to move an existing balance from one card to another, and avoid incurring interest for as long as 18 months. Although most cards have a 3% balance transfer fee, the Chase Slate currently has a promotional balance transfer offer with 0% APR and no fee .

    When it comes to a lower interest rate on a credit card, it never hurts to ask. Thankfully, the credit card market remains competitive, and cardholders who have improving credit histories will often receive a lower rate.

    At publishing time, the Chase Slate is offered through .com product pages, and .com may be compensated if our users apply and ultimately sign up for this card. However, this relationship does not result in any preferential editorial treatment.

    Who Are They Suitable For

    Low APR credit cards can be an alternative option if you are struggling to get accepted for an interest-free credit card. They are also worth considering if you would prefer not to have the pressure of clearing your balance within a set timeframe as you would with a 0% credit card.

    You can typically use a low interest credit card for purchases, balance transfers, money transfers, and even cash withdrawals. However, its best to check whether the low rate covers all of these transactions first as interest rates may vary.

    Read Also: First Premier Credit Card Reviews

    Best Rewards Credit Cards 2021

    Home \ \ Best Rewards Credit Cards 2021

    Join millions of Canadians who have already trusted Loans Canada

    Youre already spending your money on expenditures like groceries, gas, transportation, entertainment, and travel, so why not be rewarded for your spending? Thats exactly what rewards credit cards can do for you. With every dollar you spend, youll be rewarded with points that can later be redeemed for things like free groceries, lower-cost travel, and discounted merchandise, among other things.

    There are also plenty of perks that many credit cards offer along with their rewards, like travel insurance, and front-of-the-line service at concerts and events.

    But with so many rewards credit cards out there, how do you pick just one? Weve rounded up our favourites based on numerous factors to help you decide which card you should apply for.

    Criteria Used To Evaluate Rewards Credit Cards

    Our round-up of the best rewards credit cards was made using a few criteria to accurately assess each card, including the following:

    • Rewards
    Best Travel Rewards Credit Card TD First Class Travel Visa Infinite
    Best No-Fee Rewards Credit Card MBNA Rewards Platinum Plus Mastercard
    Best Credit Card For Groceries Scotia Momentum Visa Infinite Card
    Best Credit Card for Restaurants and Entertainment American Express Cobalt Card

    Lowering Your Interest Rates Through Debt Consolidation

    How To Get Lower Credit Card Processing Fees

    Debt consolidation is a way of taking matters into your own hands and proactively attacking your debt. This is particularly a good solution if you have more than one high-interest credit card. Options range from debt management to other interest-bearing credit solutions. There are upsides and downsides to all of them, and none will eliminate what you owe.

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    The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.

    Comparing The Value Of On

    For those interested in reducing the amount they pay in credit card interest, the best way to avoid interest altogether is to pay your credit card balance in full. While that isnt always possible, the next best thing is to consider a credit card with zero interest or low interest rates.

    It is nearly always the case where paying less interest is better. However, in the world of credit cards, understanding the value of each of these cards and which situation is more appropriate for which card is crucial.

    It is best to use an ongoing low-interest-rate credit card if you:

    • Have revolving credit card debt balances
    • Pay over 18%+ interest rate on your current credit card
    • Want to earn rewards for your purchases

    While it is never advantageous to pay credit card interest, sometimes, it is a necessary evil. A 0% interest credit card can be beneficial if you:

    • Want to make a large purchase and need short-term financing
    • Are uninterested in credit card rewards
    • Can handle a hit to your credit score

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    No Foreign Transaction Fees

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    Be Careful How You Use Your Cards

    The information below applies to all your credit cards:

    • Make at least the minimum repayment every month, even if you have a 0% deal. Otherwise, youll pay penalties and could lose your 0% deal. But pay as much as you can to stop the debts mounting up.
    • Set up a Direct Debit to make sure you never miss a payment. You can set it up for any amount you want, but make sure its for more than the minimum repayment.
    • Check for any important changes in every statement and letter your lender sends you, such as an increase in your interest rate. Also check your statements to make sure all the spending is definitely yours.
    • Dont use your card for cash withdrawals or credit card cheques. Youll be charged fees and higher interest for the whole period until you pay it off.
    • If you have a 0% balance transfer credit card, avoid spending on it. Any purchases you make will usually not be included in the 0% deal offer. So youll be paying interest on those purchases if you dont pay them off in full by the end of the month.

    Take Stock Of Your Situation

    How to Lower Credit Card Interest Rates

    Before you approach your card issuers to ask for lower interest rates, you’ll want to take stock of the rates you’re currently paying. You can find them listed on your statement, in the top rows of the table known as the “Schumer box.” The entry for “Annual Percentage Rate for Purchases,” which affects daily charges and related balances, is the one to focus on when seeking rate reductions. Note this figure for all of your open credit card accounts.

    In addition, if there’s urgency in your desire for lower interest ratesif you’re unexpectedly unemployed, for example, or have experienced a medical emergency or other circumstances that create a financial hardship, you can include that information along with your request for an interest rate reduction. Be prepared to explain the situation clearly, briefly and in a matter-of-fact fashion.

    It’s also helpful to take a look at your financial situation with a mind toward the way credit card issuers do business and the reasoning they apply when setting interest rates. Credit scores are designed to predict the likelihood you’ll fail to pay back your debts, with lower scores corresponding to a greater likelihood of payment failure. Lenders tend to view customers with lower credit scores as riskier to work with, and they charge them higher interest rates to compensate for the extra risk. So if you’re looking for lower interest rates, one way to make a case for them is to show you’ve increased your credit score.

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    Ask For A Lower Interest Rate From Your Credit Card Issuer

    In the wake of COVID-19, many banks are offering temporary credit card payment deferral programs along with reductions in interest rates. Check with your bank either on your online app or with a customer service representative if youre eligible.

    If youre not eligible or your card issuer doesnt offer such programs, consider picking up the phone and trying to negotiate for a lower rate. As the saying goes, it never hurts to ask.

    Here are some quick tips to help you in the negotiation process:

    What Are The Disadvantages Of A Low Rate Credit Card

    Some low-rate credit cards also charge fees if you are transferring a balance or if you use them abroad, which can add to the cost further.

    There is also usually a fee to pay if you withdraw cash on your credit card, and keep in mind that interest will be charged from the date of the withdrawal, even if you clear your balance in full that month.

    A fee will also be charged if youre late making a monthly payment or if you miss it completely, and your credit rating will be affected too. To make sure you remember to pay on time, its worth setting up a monthly direct debit.

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    Want To Get Out Of Debt Learn How To Pay Less Interest On Your Credit Cards

    One of the great misconceptions about debt is that the cards themselves are bad. The truth is, they’re really not. Rather, it’s the effect of double-digit interest rates that make them so toxic to our personal finances. The exponential growth of an account balance quickly causes purchases we thought we’d easily pay off over a few months to grow into something that seems like it will take years to knock out.

    Luckily, ridiculously high interest rates don’t have to be part of your credit card experience. It’s possible to negotiate to get a lower interest rate if you know whom to talk to and what strings to pull. If you can do a little bit of work to get inside your credit card company’s head and are willing to spend 15 to 20 minutes on the phone, there’s at least a 50% chance you can save yourself a few thousand dollars over the next year.

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