How to Reduce Credit Card Interest Rates?

Last Revised on July 10, 2013

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Use of credit cards hasn’t changed much, but the interest rates these companies charge has increased over time. Whether you are trying to pay off debts or not accumulate too much of them, it is good idea to consider lowering your credit card interest rates. You have to realize that you have to take the first step to plan on how to lower the interest rate on your credit card. We will provide you some good tips here.

Best and Easy Ways to Reduce Credit Card Interest Rates

Pay off the debts: Even though we tend to worry about how high interest rates are on our credit cards, what we should be worrying about is the how high the balance we keep on our cards. The higher the balance, the higher the interest charges will be. If our balance is zero, there will not be any interest charges. Zero is the magic number; the interest rate for zero balance is zero no matter how high the rate is. Therefore, try making payments on time. After that the only thing you will be worrying about is the fees and any hidden charges.

Call your credit card company: Your credit card interest rates are determined by your credit card company, so they are the one you should contact. You will easily find their phone number on anywhere from the monthly bill statements to the card itself. Just ask them who can help reduce your lower the rate and the representative will transfer you to the right person in charge. It only takes few minutes to make a call, but saves you a lot of money every single month following that call.

Hardship Program is your friend when in need: Many credit card company has a hardship program to help customers who are going through difficult financial hardships in their life. This program helps credit card customers to reduce interest rates down to half; some will even cut the interest rates all the way down to zero. The criteria and eligibility varies from one credit card to another; but some of them will not allow you to use the card when you are enrolled in that program, other will bring the interest rates back to higher number after 6 months.

Be a negotiator on your behalf: many situations in our life require somebody to negotiate for us due to education or law requirements such as lawyers, but it is not a requirement to have a lawyer represent you when negotiating to reduce your credit card interest rate. It does not need special skill to negotiate decreasing interest rate on your credit card. Best way to negotiate with the credit card company is to reinforcing how long you have been customer with them and your history of making payments on time, while reminding them of your difficult financial situation you are in at present.

Simply transfer credit card to lower interest rate: whether it is the same credit card you want to keep or a new offer you just received, transferring credit card account to a lower interest rate credit card is probably the easiest way of all the steps and choices. Many creditors offer 0% introductory APR to get more customers to sign up, so depending on your circumstances you may want to take advantage of low interest balance transfer cards; sometimes the catch is that there are fees associated with it. Some credit card transfer fee could go up to 7%, which means for $1000 the transfer fee you will be paying is $70. That is a lot of money to spend on paying balance transfer fees if you won’t be saving much from decreasing interest rate by 0.02% for example. So you should do your own calculation before deciding to switch between credit card companies because the rate may not last long, it could just be for the short period to get you to pay high transfer fees.

Increase your credit score:  Lenders and creditors often base the interest rate at which to charge you on your credit score. One of the easy ways is to pay off your past loans and other debts now and current bills on time. This will help increase your line of credit and make it easier to lower your credit card interest rate.

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2 Responses to “How to Reduce Credit Card Interest Rates?”

  1. step by step guide to reduce credit card interest rate - here is how I did it Says:
    December 18th, 2010 at 7:17 pm

    I am not sure why people are having difficulty reducing interest rates on their credit card by the companies. It’s a tough time right now; if you recently got a new credit card but isn’t happy with the interest rates definitely call them. You don’t have to see it as a negotiation, but consider it as a part of the procedure. Here is what you do:
    1. Find out the exact balance amount you owe to your credit card company.
    2. Make a plan how you are going to pay them off; before asking reduction in interest rate, you have to prove you deserve the interest rate cut down.
    3. Do a research about average interest rates on credit cards out there for you.
    4. Call the credit card company and tell them why you want the interest rate reduced.
    5. Don’t accept the first “No, we can’t; I am sorry” reply from the customer representative. Ask for supervisor.
    6. If all the attempts fail, search for better credit cards with lower interest rates. There are always an alternative; it all depends on how much time you are willing on spend on getting new cards.

  2. how to lower credit card interest rates the easy way? Says:
    January 4th, 2011 at 10:13 am

    I agree you can with all the different ways listed above to reduce the interest rates but I can add a couple more easy things people can do:
    Credit Unions: they usually offer the lowest interest and fees while offering all the features of a bigger credit card companies.
    Lending within Social groups: it is called peer lending, even though it is not exactly borrowing from friends. What it is is that it is a social lending club, where you bring your proposal up and if it is attractive enough more people will bid on it.
    Average American has a credit card debt of $7000, and working towards paying off them first, if at all possible, would be the most beneficial thing you could do before looking for new credit cards.

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