Lower Your Credit Card’s Interest Rate – Here’s How

Credit cards are some of the most robust financial instruments you can have. They allow you the flexibility to make purchases, get cashbacks, rewards points, and frequent-flyer miles. Credit cards also allow you to grow your credit limit and pay without interest during the grace period.

Conversely, late repayment leads to high interest rates, with some Annual Percentage Rates (APRs) as high as 30%. So, repay your balance in full each month to avoid incurring any interest. But if you cannot, this article will show you how to get lower interest rates.

Assess your Credit Health

You can only negotiate for a better APR when you fully understand your credit health. Credit health/score is a significant component of your credit. Log into your bank account or contact the bank to find out your current score and find a way to boost it. The higher your credit score is, the better the APR you can get from your credit card issuer. Lenders instinctively offer a higher APR to customers with a low income, lower credit score, or higher credit balances due to the higher risk of default.

You can improve your credit health by making on-time payments and clearing outstanding debts. Moreover, use your credit card regularly to pay rent, utility bills, online purchases, or make deposits at online casinos accepting credit cards but avoid maxing out your card. Positive card activities can help build a good credit score.

Then get all the facts right about your finances. You should know everything about your income, expenses, total assets, liabilities, and other financial details.

Talk to Your Lender

Once you have all the details, the second step is to talk to your lender. You can simply ask them to lower your credit limit. In some cases, it is just that easy and does not have to involve so many hoops and jumps. A low APR can be any interest rate of 10% and below.

Share Your Financial History

Tell the credit card lender about your financial situation based on the facts you have collected in the first step. Try to inform them of your good credit history or if your credit score improved recently since the credit rating is done yearly. Make a respectful case regarding rival company offers you’ve received and any financial hardships you are facing. If the lender cannot match the competitor’s offerings, they consider providing you with other perks instead of the interest rate, such as bonuses or a waived annual fee.

Call Again

Negotiations may be tense, so do not be discouraged if the sales representative won’t budge. You can call later and talk to a different representative or politely request to talk to a supervisor.

Suggest Closing Your Accounts

If all options fail, you can consider closing your accounts. However, this option carries a lot of consequences since you will have to clear your current credit bills before closing your account. This option may not work when you have crippling credit card debt.

Consider a Credit Transfer

Sometimes, negotiating with your current lender won’t yield meaningful results. In this case, you may consider moving your outstanding debt from one or more credit cards onto a new card, ideally with a lower interest rate. Compare various credit companies including Visa and MasterCard to get the best low APR. However, you must pay a transfer fee ranging from 4 to 5% of the credit you are transferring.

Fortunately, most lenders offer 0% introductory APRs on balance transfers for a set introductory period, which may vary between 6 and 21 months. The added time can help you clear your debt at a lower interest rate and improve your credit score, which prequalifies you for even lower interest rates. Balance transfers typically cannot happen within the same bank/lender.

Footnote:

• Courtesy to Kevin Roberts.