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Credit Card Interest Rate
22 May 2019

How Low Can You Go: How to Lower Your Credit Card Interest Rate

As more than a third of all American households have a considerable amount of credit card debt, many debt holders are paying way too much in interest. If you apply for one without knowing how to lower your credit card interest rate, you’re liable to be one of those overpaying people. It might take some work, but lowering your interest rate is a way to save hundreds of dollars every year.

Here are five ways to bring your interest rate down.

1. Build Up Your Credit Score

When you want to bring down your credit card interest rate, you need to prove that you’re a good personal loan holder. When you’ve defaulted on debt or paid it back too slowly, you’re showing future lenders who you are as a debt holder. To build up good credit for the future, you need to ensure that you treat every debt and bill that you have with respect.

Keep your credit utilization rate, meaning the percentage of how much credit you use at any time, at 30% or less. That means that if your card has a $1k limit, you need to keep your bill below $300.

Good credit is your best tool for negotiating a lower interest rate. You’ll be able to show evidence that you know how to keep control over your spending and live within your means.

A positive payment history looks good on you. Review your credit report every year to make sure that you’re never spending outside of your limits. Check for accuracy and work to keep your score down.

Don’t be afraid to dispute things on your credit report. There are opportunities for loans and credit cards for people with even the poorest credit.

2. Make Them Work For You

There are always more fish in the sea when it comes to credit card companies. When you’re looking to get the best credit card deal, pit competing offers against one another. If your current bank is offering an APR that seems too high and a competitor is offering a lower rate, see if your current bank will match you on your new card.

Interest rates can seem pretty minimal when you calculate them moth to month, but over the course of the year, the numbers will add up. If you have a 15% APR on your $10,000 credit line, a 3% jump means that you’re paying $300 more every year, which is nothing to sweep under the rug.

Do some research to learn about all of the cards out there. Some cards will offer you all kinds of extra benefits to distract you from their high-interest rates. Don’t be fooled and reach out directly to the lender before you settle on a rate that you’re not very happy about.

3. Transfer a Balance

One of the ways that many cardholders make the most out of their credit opportunities is by transferring their balances. By transferring your balance, you can get away from a toxic card solution and get a deal from one who gives you a better offer. When you’re struggling to pay down your debt, every dollar counts, so a lower interest rate matters.

If you have a few lines of credit that aren’t very high but that have high-interest rates, you can combine them all on one card. This one card, if it has a lower interest rate, could end up saving you a lot of money over the course of paying it off.

If you can get a card with a 0% introductory rate for the first year, you could save hundreds or even thousands on repaying your debt in a year. This is a safe and smart way to pay off your debt and lower your credit card stress.

4. You Might Need to Renegotiate Periodically

While not many people spend a lot of time talking about their debt, one of the ways to lower your rate from time to time is to renegotiate. When you call your lender from time to time and talk about the interest rate you’re struggling with, they might be willing to lower it.

When you’ve shown them a pretty consistent rate of repayment and serious attempts at lowering your debt, they’ll be willing to offer lower interest rates. You might be able to get a lower rate after just six months of paying off your debt on a consistent basis.

Don’t be afraid to check them out every few months to see if they could lower your debt.

5. You Might Have to Walk

If you’re not prepared to walk at any point, you might not want to pick up the phone. When trying to get your debt down, you sometimes need to play hardball. This means not just threatening to leave, but being willing to walk away from the table.

If your card provider isn’t willing to budge or you find that they’re not being honest about their fine print, you might need to walk away.

You can’t just threaten to walk away. At times, you might have to act. When you act, you’ll find that most companies will try to win you back.

If they don’t, then they might not have valued your business from the start. When you can’t get what you deserve from a car provider, you might just need to be low-drama and walk away rather than try to fight with them.

There Are More Ways How to Lower Your Credit Card Interest Rate

When you’re figuring out how to lower your credit card interest rate, it’s going to take a little bit of leg work. Spend a little time doing some research online and don’t be afraid to call up a provider before you sign up for a card with them. Remember, that they’re not doing you a favor and that paying their interest makes you a  customer.

If you think an online loan would be better for you, check out our guide for getting quick approval on one. Here are some other articles you might find helpful:

Is a Fingerhut credit card a good option for bad credit?
Buying for baby – 5 easy to get credit cards for new parents
How department store credit cards can help bad credit
How to choose a credit card – the best credit card offers