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Credit Help and Tips

How Can I Lower My Credit Card Interest Rate?

Many consumers are riddled with credit card debt thanks in part to APR that is through the roof, making it very difficult to pay down debts and get back in the black.

So you may ask yourself, “How can I lower my credit card interest rate?”

Well, credit card issuers aren’t in the business of losing customers, and if they feel the threat of you leaving them for another issuer, they’ll typically do whatever they can to keep you “on-board.”

It’s clear they want our business, as evidenced by the number of offers received in our mailboxes on what feels like a daily basis, and the bountiful array of credit card advertisements found on nearly every website on the Internet.

And though reducing your interest rate may cut into their profits, losing you (and your valuable debt) altogether will have a far greater impact on their revenue.

So, how can you take advantage of this situation you ask? Well, often it’s as simple as asking…

Call Your Card Issuer and Ask for a Lower Interest Rate

  • This old trick has been around a while but still works to this day
  • Simply grab your phone and call your credit card issuer
  • Ask them point blank for a lower interest rate
  • Tell them you’re thinking about transferring the balance elsewhere if they don’t oblige

If you’re a good customer with a solid payment history and high credit card APR, call your card issuer immediately to ask about an interest rate reduction.

It’s a very standard practice, and one that pretty much any customer service representative can handle without asking a supervisor, even if they initially tell you their hands are tied.

When you do call, make sure you’re assertive and clear about what you want. Ask for more than you think they’ll offer, and you should end up with a solid rate reduction.

Tell them that you have other, better offers that you’re actively considering if you’re forced to continue paying the APR they currently offer.

The second they hear that you’re considering moving your debt elsewhere, they will likely oblige to your demands, and lower your rate.

The changes should be instant, and you’ll start saving money immediately. After all, why pay 30% APR when it could be as low as 10-15%.

I’ve even heard that some customers have had their 0% APR introductory rate extended simply by asking for an extension. Remember, the squeaky wheels get the grease.

The annual savings could be in the hundreds or even more if you carry a significant amount of debt, and should allow you to pay off your debt a lot faster and more economically.

Either way, don’t be afraid to ask for a discount from your card issuer; it’s your right as a customer and it only takes a few minutes.

Tip: If at first you don’t succeed, hang up and call again (HUCA).

Try a Credit Card Balance Transfer

  • An even better strategy might be a credit card balance transfer
  • While you may need to pay a small percentage of the balance upfront
  • You could get the opportunity to pay 0% APR for a long period of time
  • This could save you a ton of money and stop the accrual of interest in its tracks

There’s another alternative if you want to save even more money.

If possible, consider executing a credit card balance transfer to move all your existing debt to a 0% APR credit card.

Doing so will help you avoid finance charges and interest altogether for a specified period of time, typically 12 months or longer.

During that time, you can set up a plan of attack to pay off your credit card debt.

For example, if you transfer $3,000 and you’ve got 12 months of interest-free financing, maybe pay $250 each month so the balance is zero before interest kicks in again.

With the interest rate set to zero, every penny you pay toward the debt will go to the principal balance, as opposed to interest.

This is a much better way to repay the debt, instead of watching it balloon out of control each month.

Just know that the interest rate will jump back to your purchase interest rate at the end of the introductory period, so tackle the debt while it’s still interest-free!

Oh, and one other cautionary mention.  If you go with the first option above, make sure your credit card issuer lowers your APR for your existing balance AND future purchases.

If they fail to do so, you’ll just be paying the lower APR balances off first thanks to negative payment hierarchy, assuming you continue to make purchases with the same credit card and only make the minimum payment each month.

Credit card issuers are full of tricks, but you can even the playing field with these simple tips!

Read more: How to transfer credit card balances with bad credit.

By Colin Robertson

Colin created this blog after spending several years in a job that required him to scour credit reports on a daily basis. His goal is to help individuals better understand their credit and get the most out of credit cards.

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