- Research Your Current Rate
- Call Your Credit Card Company
- Consider a Balance Transfer
- Pay Your Balance in Full Every Month
If you’re paying too much in credit card interest, it’s time to take action. Here’s a step-by-step guide on how to lower your credit card interest rate.
Checkout this video:
Research Your Current Rate
If you have a credit card with a high interest rate, it’s important to know what that rate is before you start looking for ways to lower it. By law, your credit card issuer must disclose your current APR in your monthly statement. You can also call your issuer and ask for your current rate. Keep in mind, though, that your interest rate may be different from the rate you see advertised.
Know what your interest rate is
Your interest rate is the percentage of your credit card’s balance that you’ll be charged each month in interest. For example, if your credit card has a balance of $1,000 and an interest rate of 18%, you’ll be charged $180 in interest each month.
If you don’t know what your interest rate is, you can find it on your most recent credit card statement. It’s usually listed as an “Annual Percentage Rate” (APR).
Find out what your credit score is
Your credit score is a number that represents your creditworthiness. It is based on your credit history, which is a record of your borrowing and repayment activity. The higher your score, the better your chances of getting approved for a loan or credit card with a low interest rate.
There are three main credit reporting agencies in the United States: Experian, TransUnion, and Equifax. You can get your free annual credit report from each of them at AnnualCreditReport.com. Once you have your reports, look through them carefully to identify any errors. If you find any, dispute them with the credit bureau.
If you don’t have a good credit score, there are still things you can do to lower your interest rate. For example, you can ask the issuer for a hardship program or shop around for a card with a lower APR.
research what the average interest rate is for your credit score
Your credit score is one of the most important factors in determining your interest rate. Take some time to research what the average interest rate is for your credit score, and use that as a starting point when negotiating with your credit card company. Even a 0.5% decrease in interest can save you hundreds of dollars per year, so it’s worth taking the time to shop around.
When you’re ready to start negotiation, call your credit card company and ask to speak with a manager. Be polite but firm, and explain that you’re considering transferring your balance to another card with a lower interest rate. Ask the manager if they’re willing to match or beat the lower rate, and be prepared to give them specific details about the other offer (such as the interest rate, promotional period, etc.). If they’re not willing to lower your rate, thank them for their time and politely end the conversation.
Remember, you have nothing to lose by asking – so don’t be afraid to negotiate!
Call Your Credit Card Company
One way to lower your credit card interest rate is to simply call your credit card company and ask for a lower rate. This only works if you have been a good customer and have been making your payments on time. If you have been late on your payments or have missed payments, then this method will most likely not work for you.
Have a plan
When you call your credit card company, you’ll likely be trying to do one of two things: lower your interest rate or get a break on fees. You might also want to negotiate a payment plan or some other type of relief, but that’s less common.
If you’re asking for a lower interest rate, know what the current rate is and what rates are being offered by other companies. It’s helpful to have this information in front of you when you make the call. You’ll also want to be prepared to explain why you’re calling and what kind of customer you are. For example, if you’ve been a customer for a long time and have always paid your bill on time, tell the customer service representative this information.
Be polite but firm when speaking with customer service representatives. They are often trained to give customers the run-around, so it’s important to be clear about what you want. If you don’t get the answer or resolution you’re looking for, ask to speak with a supervisor.
Don’t be afraid to say that you’re considering taking your business elsewhere if the company won’t work with you. This is especially effective if you’ve been a loyal customer for many years. In the end, it’s up to the credit card company whether or not they want to keep your business.
When you call, be polite. It’s likely that the person you talk to can’t lower your interest rate, but they can connect you with someone who can. And, if you’re polite, you may be more likely to get a “yes” when you ask to speak to a supervisor.
Here’s what to say:
Hi. My name is _______ and I have a question about my credit card interest rate. Could you please help me?
I’d like to speak to a supervisor, please.
One way to get a lower interest rate on your credit card is to simply call your credit card company and ask for a lower rate. It’s important to know what you’re talking about before you make the call, and it’s also important to be persistent.
Here are a few tips:
-Start by asking if there are any promotions or offers that would lower your interest rate. If not,
-Politely explain why you feel you deserve a lower interest rate. Perhaps you’ve been a loyal customer for many years, or maybe you carry a high balance. Whatever the case may be, be sure to state your case clearly and concisely.
-If the customer service representative is unwilling to help, politely ask to speak with a supervisor. Sometimes superior staff members have more authority to make decisions on behalf of the company.
-If you’re still not getting anywhere, threaten to cancel your credit card and transfer your balance to another card with a lower interest rate. This is usually enough to get the attention of someone who can help you out.
Consider a Balance Transfer
Find a balance transfer credit card
A balance transfer is when you move your credit card debt from one card to another that has a lower interest rate. This can help you save money on interest and pay off your debt faster.
There are a few things to consider before you do a balance transfer, like whether the new card has an annual fee and what the promotional rate will be after the intro period ends. You also need to make sure you can pay off your debt before the intro period ends, or you’ll be stuck paying a high interest rate on the remaining balance.
If you’re considering a balance transfer, here are a few things to keep in mind:
* Check if there is an annual fee for the new card. If so, make sure the interest savings will outweigh the cost of the fee.
* Find out what the promotional rate will be after the intro period ends. You’ll want to make sure you can pay off your debt before that happens.
* Make sure you can pay off your debt before the intro period ends. If not, you’ll be stuck paying a high interest rate on the remaining balance.
Do the math
Before you decide to transfer your balance, it’s important to do the math to make sure that it makes financial sense. In order to make a balance transfer, you will typically need to pay a fee – sometimes this is a percentage of the balance being transferred, or a flat fee. You will also need to have good credit in order to be approved for a balance transfer.
Once you know how much the fee will be and what your new interest rate will be, you can calculate how long it will take you to pay off your debt if you only make the minimum payments. If you think you can pay off your debt within the promotional period, a balance transfer can be a great way to save money on interest. However, if you think it will take you longer to pay off your debt, a balance transfer may not be the best option.
Consider the fees
Most balance transfer credit cards come with a fee, usually 3% of the amount of the transfer. That’s $30 for every $1,000 transferred. To decide whether a balance transfer makes sense, crunch the numbers to see if the savings in interest will offset the cost of the fee. For example, if you’re paying 17% interest and fees on a $5,000 balance, it would take 19 months to pay off the debt by making just the minimum monthly payment. If you transfer that debt to a card with a 5% intro balance transfer fee and 15% ongoing APR, you’ll pay $250 in fees—but save more than $2,000 in interest payments over the life of the debt.
Bottom line: A balance transfer can save you big bucks—but make sure you understand all the rules and fees before you sign up.
Pay Your Balance in Full Every Month
Paying your credit card balance in full every month is the best way to lower your credit card interest rate. When you carry a balance on your credit card from month to month, you are charged interest on that balance. The interest rate on your credit card is based on your credit score and can be as high as 30%. By paying your balance in full every month, you can avoid paying interest on your balance and save money.
Make a budget
One way to become more mindful of your spending is to make a budget. Sit down and track your income and expenses for a month. Include everything, from your rent or mortgage payment to the money you spend on coffee or lunch. Once you have a good understanding of where your money goes, you can decide where you can cut back.
If you find that you are spending more than you are bringing in each month, it is time to make some changes. You may need to find a new job that pays more, or you may need to get rid of some of your expenses. If you travels a lot, for example, see if there are ways you can cut back on your travel expenses. If you eat out often, see if there are ways you can cook more meals at home.
Making a budget can help you become more aware of your spending habits and make it easier to find ways to save money.
Set up automatic payments
One way to make sure you never forget to pay your credit card bill is to set up automatic payments. That way, the minimum payment will be deducted from your checking account automatically each month on the date you specify. go to your credit card issuer’s website and look for the “make a payment” or “manage account” tab. From there, you should be able to set up automatic payments. Most issuer allow you to choose the day of the month when you want your payment deducted, so you can schedule it for a day after you get paid. Just be sure you have enough money in your account on that day to cover the payment!
Cut up your credit cards
If you have a lot of credit card debt, one of the best things you can do is cut up your credit cards and close the accounts. This may seem like a drastic step, but it’s one of the most effective ways to lower your interest rate and get out of debt.
When you cut up your credit cards, you’re effectively eliminating the temptation to spend money you don’t have. This will help you focus on paying down your debt without accruing any more interest. It will also force you to use other forms of payment, such as cash or a debit card, which can help you stick to a budget.
If you’re not ready to cut up your credit cards, there are other steps you can take to lower your interest rate. You can call your credit card company and ask for a lower interest rate, or transfer your balance to a card with a lower APR. You can also look for a new credit card with a 0% introductory APR on balance transfers. Just be sure to read the fine print before you sign up for any new card offers.