How to Lower Your Credit Card Interest Rate

how to lower your credit card interest rate

lowering your rate can get you out of credit card debt faster

How do you lower your credit card interest rate? If you find yourself in credit card debt and are trying to pay it off, then lowering the interest rate on your cards can help accelerate the process. With the average APR on credit cards in the U.S. being between 15% and 22% you can see the appeal of lowering the rate. It is common sense that a loan with a lower interest rate can be paid off sooner, since more of your payment is attacking the principal and not serving the interest. Seems simple enough. But, how do you get a lower rate? Here are a few pointers that may help you out.

Research

Before asking for a lower rate you will want to gather all necessary information, so you have facts and numbers on your side. At a minimum you should know your balance and how much interest you paid in the past year. Losing a customer can be costly to a credit card provider. They want to keep you and knowing this basic information can help you in your mission for a lower rate.

Become a VIP Customer

Credit card companies don’t want to lose a good customer. Now is a good time to become one, if you aren’t already. Making consistent and timely payments will increase your credit score. This score is the main factor that the card companies will look at when deciding if they will lower your credit card interest rate. Improving your score is usually a matter of paying your bills on time and keeping an eye on your credit reports. The card issuers will most likely want to see a very good credit score. So, 740 or higher might be what you need to be considered for a lower rate.

Make the Call

You’ve done your homework, and you have cleaned up and improved your credit score. You are now ready to make a call and ask that your credit card interest rate be lowered. There is a number on the back of your card. Call it and speak to a representative. Be sure to write down their name and direct phone number in case you get disconnected.

It could be as simple as asking on the first call. There is a lot of competition amongst the card issuers, so you just might qualify for a lower rate right out of the gate. But if not, don’t give up. Hang up and call back. Speaking to a different representative can sometimes do the trick. If you still hit a wall, then ask for a manager.

Be armed with knowledge of other credit card offers and be prepared to leave for a better deal. This may persuade your card issuer to grant your request for a better rate.

If they still won’t budge, then you can try to be creative. Ask for a promotional rate that may normally only apply to new card holders, for instance.

As with any negotiation, you have to be willing to walk away. If all of the above wasn’t successful, then explain to your credit issuer that you going to close down the account and go to a competitor’s card. This final tactic may finally persuade them to lower your rate. If not, then it is time to move on.

Find a Different Card

If all attempts to lower your rate with your existing card holder have failed, then it is time to find a new credit card company to do business with. A balance transfer can wipe the slate clean of dealing with your current card provider. Keep in mind that most balance transfers do have a fee. You’ll normally pay between 3% and 5% of the balance that was transferred. But you may qualify for 0% interest for 12 or more months. This should hopefully give you enough time to pay off your balance in full. Personally, I’d recommend only doing a balance transfer if you can have the entire balance paid off by the time that the 0% introductory interest rate expires.

In Closing

If you have credit card debt, then lowering the interest rate on your cards can help you pay off your debt faster. Keep in mind these steps to take to help you lower your rate.

  • Do your homework. Know your balances and interest payments before calling
  • Clean up your credit report and raise your score
  • Make the call. Be prepared to ask for a manager and have knowledge of the competition
  • Be willing to leave your provider and do a balance transfer to the competition

Read Also:

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