Tuesday, October 4, 2022

How To Lower My Credit Card Interest

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Reflect On Your Finances

How to lower your credit card interest rate

If youâre looking to tackle your credit card debt, it can be worthwhile doing some self-reflection and examining your finances first.

Ask yourself: what led you to rack up consumer debt? Was it overspending on nice-to-haves, a cash crunch due to a reduction in income, or an emergency? These are important questions and can help you spot possible solutions to avoid getting stuck in a cycle of debt .

Youâll also want to bust out a pen and paper and start tracking some hard numbers. List all your debts, including the amounts owed and interest rate for each. Calculate your average monthly budget and how much you have leftover after fixed costs that you could put towards debt repayment. Even consider keeping tabs on your daily purchases to identify where you could cut back and curb your spending.

Option #: Apply For A New Credit Card

Despite your best efforts, you cant force your card issuer to change the terms of your agreement. No matter how prepared you are before you make the call, theres a chance your card issuer will deny your request for a lower rate. If this happens, you may want to consider opening an alternative credit card and taking your business elsewhere.

Depending on the condition of your credit, you may be able to qualify for a balance transfer credit card with a low-interest introductory offer. For those with good credit, balance transfer offers can provide a 0% APR on transferred balances for a year or more.

Some introductory offers will only apply to one type of transaction, such as solely new purchases or balance transfers.

Make sure to include any potential fees when doing the math for a balance transfer. For instance, many cards charge balance transfer fees that can run between 3% and 5% of the total transferred balance.

If you qualify for a balance transfer offer, consider coupling your new, lower rate with an aggressive debt elimination plan. By using these two strategies together, you may finally be able to eliminate your credit card debt once and for all.

Keep in mind, you dont have to close your existing credit card account when you open a new one. If you pay off your full balance, the higher interest rate on your old account wont cost you any extra money. You only have to worry about credit card interest fees whenever you carry a balance on your account.

Capital One Credit Card Interest Rates:

Are credit card interest rates going down?

Credit card interest rates are not going down. The interest rate on the average credit card account has gone up from 11.82% in 2014 to 15.1% in 2019 right around a 20-year high. And the average APR among new credit card offers is now above 19%, having climbed steadily in recent years.read full answer

The August 2019 average margin was 11.72%, a percentage point higher than 2017s 10.6% margin, and also the highest margin on record. Credit card companies dont want their rates to fall just because the Fed decides to discount its target. Plus, high credit card rates help support all the extra rewards and perks offered by credit card companies these days.

If you dont want to deal with rising interest rates from credit card companies, you have options. For instance, you can avoid interest charges completely by paying your credit card balance in full every month. If you already have a balance that you cant afford to pay off right away, consider looking for a 0% APR balance transfer credit card. It could give you a break on paying interest and help you pay down your debt faster.

Does asking for a lower interest rate affect your credit score?

Yes, asking for a lower interest rate on a credit card could affect your if the cards issuer needs to do a hard inquiry into your credit history to determine whether or not you qualify for the lower rate.

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How Can You Get A Lower Interest Rate On Your Current Credit Card Accounts

To request a lower interest rate on your credit card account, submit a request to your credit card company via your internet account or by phone with a customer service representative. Card company representatives usually work to grant requests that satisfy their customers.

According to the figures, securing a lower interest rate is much easier than most consumers would suppose. Additionally, successful requests for concessions from credit card companies include much more than just lower APRs. Cardholders struggling with annual fees or wanting higher credit limits far more often than not found their requests accepted by their card company. Lets consider the basics of how to request these concessions and ideas for increasing your chances of securing them on your account.

Review Your Payment History

How To Lower Your Credit Card Interest Rate

Youll have the best chances of scoring a lower APR if youve had your card for a few years and made on-time payments throughout the lifetime of your account.

You may have more trouble getting a lower interest rate if your credit score isnt ideal or you have a high debt-to-income ratio, says Rebell. Before you ask for a lower APR, work on making timely payments and keeping your utilization low to improve your chances of getting a lower rate the first time you ask.

Your interest rate on your credit card is a snapshot based on your creditworthiness at the moment you apply, says Jason Steele, credit card writer and expert. So maybe you applied for that card a couple years ago when your credit wasnt that good. Since then, youve lowered your debt, youve made all of your payments on time, and you know that your credit score has improved. All of these are behaviors that can indicate youre less of a risk to issuers and improve your chances of scoring a lower rate.

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Contact Your Card Issuer

Once you feel ready, you can call your card issuer’s customer service number and ask about reducing your card’s interest rate. Here are some tips you can use and suggestions for when you don’t get a yes.

  • Explain your situation. Briefly explain your history with the card and if you’ve made lots of on-time payments. Ask for the interest rate decrease, and share why you think you deserve or need one: credit score improvements, offers you’re receiving for cards at lower rates, financial hardships or other circumstances.
  • Ask for a supervisor. If the first person you talk to can’t help, ask to speak with a manager or supervisor who may have more authority. Be polite but firm and persistent. Negotiating your interest rate is a perfectly reasonable thing to do.
  • Ask for a temporary change. If the supervisor doesn’t offer a permanent reduction, see if they’d be willing to temporarily lower your rate or offer some type of hardship option.

Tips For Getting A Lower Interest Rate

The best way to tackle high interest rates depends on the specific nature of your situation. For starters, if you always pay your credit card bill in full, you dont need to worry about interest rates. Theyre just inconsequential numbers in your situation so dont let them distract you from your primary objective of minimizing fees while maximizing your rewards earning capabilities.

If youre carrying a balance from month to month or anticipate incurring debt in the future, your options vary based on your credit standing and level of indebtedness.

Above-Average Credit:

If you have good or excellent credit, your first step should always be to compare other available credit cards in order to find one that would better meet your needs and then ask your current creditor if they can match that deal.

Creditors often grant rate reductions to consumers who have improved their credit standing in recent months or years, especially those whove managed to consistently pay at least the minimum amount required by the due date. Regardless, you have the upper hand in this situation because your credit profile is attractive enough to warrant improved terms relative to your current card elsewhere on the market. So dont be content with a simple rate reduction if far more attractive offers are attainable.

Below-Average Credit:

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Evaluate Your Current Situation

Before you call the customer service number on the back of your credit card, understand what youre working with. Know your current credit card terms, including the grace period, statement due date and your current .

Dont forget to check your credit, as well. You can use this as leverage in your negotiations. Having strong credit may indicate youre likely to repay your balances and what you owe, so credit card companies may be more willing to meet your requests.

If You Have A High Interest Rate On Your Credit Card You May Be Looking To Negotiate A Lower Interest Rate

How To Lower Your Credit Card Interest Rates?

But credit cards may also come with high interest rates that make carrying balances expensive for cardholders.

If you currently carry a balance on your card and want to avoid incurring more debt, lowering the interest rate on your card can help. But how do you lower your credit card interest rate without switching cards?

You can negotiate with your bank or credit card company to get a lower interest rate on your card. Although the card company may ultimately say no, knowing these steps could help improve your chances of getting a favorable response.

  • Consider a balance transfer credit card instead
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    Consider A Balance Transfer Card

    If you cant get your credit card issuer to lower your rate, then it may be time to move on to another lender.

    If you have good to excellent credit, you should be able to qualify for a balance transfer card with a low or 0 percent introductory APR. Be careful, though: Many balance transfer cards charge costly balance transfer fees and high APRs once the promotion is over.

    If your credit score is low, you may have trouble qualifying for a top balance transfer card. However, there are some cards that offer promotional balance transfer rates to consumers with lower scores.

    Get A Low Interest Credit Card

    While itâs always recommended you avoid carrying a balance, if you anticipate youâll need to continue using a credit card for daily purchases to tie you over during a cash crunch, itâs best to use a low interest credit card.

    Some of the best low interest credit cards in Canada come with rates as low as 8.99% to 12.99%, which is well below the average of 19.99% found on most rewards credit cards. Just be sure to only use credit for absolute essential purchases, track your spending, and avoid splurging on nice-to-haves.

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    Negotiate Apr With Your Issuer

    If you decide a lower APR on your existing card is the right option for you, call your card issuer and explain why youre asking for a lower APR whether youre facing a financial hardship or the current APR is making it difficult for you to make progress on your debt balance.

    Some credit card companies may compromise by lowering your interest for a short period during a hardship period before your regular rate goes back into effect. You may also have leverage if you research similar cards with lower APRs that you may qualify for. If you tell your bank this, they may strongly consider your request instead of losing you as a customer, says Rebell.

    • Introductory balance transfer rate: 0% for 21 months on Balance Transfers
    • Annual fee:
    • Introductory balance transfer rate:0% Intro APR for 18 billing cycles for any BTs made in the first 60 days. A 3% fee applies.
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    Lower Interest Rates By Consolidating Credit Card Payments

    Want a lower credit card interest rate? Try asking

    If negotiating your interest rate doesnt work out, you can look to debt consolidation to lower interest rates. There are several different ways to consolidate debt, but the overall goal is to lower high interest and combine your debt into one easy-to-manage payment.

    Its always important to keep track of your credit report to see where you stand and if some debt consolidation methods, like applying for a credit card to consolidate the other cards onto, is lowering your score.

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    Call Your Card Issuer

    Once youve gathered enough information to argue your case, call your card issuer and politely ask to speak with a representative about lowering the APR on your card. Make sure you have your notes in front of you and be prepared to bring up your research or additional details about your personal experience if that representative is slow to offer you a better deal. If you get a no, dont be afraid to call back another time or ask to speak with someone else. A different representative or supervisor may be more receptive.

    Negotiating With A Lender

    When you ask for a lower rate, its important to have a general idea of what you want to say, so we cant emphasize enough how important being prepared can be. Once all your information is in order and you have a good idea of what you wantand what you needyoull be ready to negotiate. Begin by calling the account youve had the longest, as account longevity and history may provide you some leverage. Your bank may recognize you as a profitable customer if youve been banking with it a long time.

    Be sure to emphasize your stellar repayment record, any better offers from rival companies and/or your unexpected financial hardship. Make your case respectfully, but be firm about your needs. Dont be discouraged if the rep tells you theres nothing they can do. Politely ask to be directed to a supervisor and if youre still told a reduction isnt possible consider asking for a temporary change. They may be more likely to allow a temporary change, which may help you find a better option or a new company to do business with.

    As a last resort you may suggest you will close your account if you do not receive a lower rate. This is not a threat to make lightly, as you still have to pay any outstanding debt before you can close an account. If your card has a large outstanding balance, this tactic wont hold much weight at all.

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    Consider A Balance Transfer

    Before your balances build up, consider looking for a credit card with a 0% or low promotional rate on balance transfers. Yes, opening a new card might impact your credit score, and there may be a balance fee involved, but in the long run, your score and your own financial well-being may benefit from nipping that interest rate in the bud.

    Steps to performing a balance transfer:

    Apply for a balance transfer credit card with a zero or low-interest promotional period. Then, don’t use the card for purchases. Instead you should work out how much you have to pay each month so you completely pay off your transferred balance before the zero or lower interest rate period ends. If you don’t pay off your entire balance before the promotional period ends, your remaining balance will likely have a higher APR when your promotional period ends.

    How To Negotiate A Lower Rate For Your Credit Card

    How to lower your credit card rate with a single call

    Roughly 41 percent of American households have credit card debt, while the average credit card balance is $5,700.1 Eliminating this debt can help you improve your credit, free up room in your budget and save you money. The hard part is actually paying it off and staying out of debt.

    It gets even more difficult if your interest rate is high, and you cant really make progress on reducing your balance. The longer you carry a balance, the more youll end up paying in interest, making it even more difficult to eliminate credit debt.

    While it may take time and a little bit of research, there are ways to lower your credit card interest rates. Well walk you through how to negotiate a lower interest rate on your credit cards.

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    How To Pay Off Your Credit Card: 8 Ways To Reduce Interest Charges

    Reading up on credit cards? Wondering whatâs the best card for me? In under 60 seconds, CardFinder narrows down your top matches without impacting your credit score, no SIN required

    If youâre grappling with credit card debt, youâre not alone. And there are steps you can take to lower your credit card payments and reduce your interest rates .

    Below we cover eight ways to reduce your credit card interest charges.

    Situation : You Have A High Interest Credit Card But Always Pay The Balance Off On Time And In Full

    If this is you, keep up the good work and no, there’s no pressing need to close your card. You only pay interest on a credit card when you carry a balance, so you don’t need to worry about your interest rate if you feel absolutely comfortable paying your balance in full and on time each billing cycle.

    “If you pay your balance in full every month, then the interest rate on the credit card is irrelevant to your situation,” Roger Ma, a certified financial planner atlifelaidout® and author of“Work Your Money, Not Your Life,” tells Select. “And if the card is a great fit otherwise, then certainly hold on to it.”

    This is particularly true if that high-interest card comes with great rewards, as is often the case.

    For example, both the Alliant Cashback Visa® Signature Credit Card and the Capital One SavorOne Cash Rewards Credit Card ranked on Select’s list of the best cash-back credit cards. Whereas the Alliant Cashback card has a regular 12.24% to 22.24% variable APR on purchases, the Capital One SavorOne card has a higher 16.49% – 26.49% variable APR on purchases. Your credit score will determine what APR you have in those ranges, but it’s worth noting that the one with the overall higher interest rate has a few extra premium rewards.

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