[Disclosure: Cards from our partners are reviewed below.]
It’s important to know that you can lower your credit card interest rates, no matter the reason you want to do so. So, whether you’re trying to get the balance on your credit card paid down faster, you plan to make a large purchase soon and don’t want to pay more than you have to, or you want to improve the annual percentage rate (APR) on your credit card for any other number of reasons, there are several ways you can do so. You can request an lower APR from your issuer, look into balance transfer or low interest credit cards and/or work on your credit scores. (Remember, good credit helps you qualify for the best terms and conditions.) Let’s break down the four big ways you can lower your credit card interest rates.
1. Call & Ask Your Issuer to Lower Your Interest Rate
The easiest thing is often the simplest — try calling your credit card issuer and seeing if they’ll adjust your APR (or find out what you’ll need to do to get a lower interest rate). If you have a good payment history with your issuer, you may qualify for a lower APR simply by calling and asking for one. And if the first customer service rep you speak to isn’t willing to lower your interest rate, don’t be shy about calling and asking again or even requesting to speak with a manager. Another rep may be willing to cut you a deal. (Note: Sometimes issuers will pull a customer’s credit report when they request better terms on a current credit card, so be aware this move could incur a credit inquiry on your credit reports — which can ding your scores.)
2. Do a Balance Transfer
If you’re looking to lower your credit card interest rate so you stop racking up additional charges and can finally get that credit card debt paid off, a balance transfer may be a good option. Many cards come with an introductory 0% APR for a given period of time so you can really tackle paying down your balance. Keep in mind, however, that you will see a higher APR once that introductory APR rate expires so you’ll really want to focus on getting the balance paid off before that kicks in. (You can use this credit card payoff calculator tool to see how long it might take you to pay off your debt based on different APRs.)
Take a look at the cards in your wallet and do some research on the APRs they currently carry. When you comparison shop for a new card, in addition to taking note of the APRs, you’ll want to keep your eye out for fees that come with a balance transfer. Often times, there are balance transfer fees (typically around 2% to 5% of the balance) when you move your balance to a low interest rate credit card. As you compare your different options, make sure you budget this into your payment plan. (You can learn more about the best balance transfer credit cards here.)
3. Improve Your Credit Scores
The better your credit, the better the terms and conditions you can qualify for. Not sure of your current credit standing? You can see a free snapshot of your credit reports on Credit.com. You’ll also receive guidance on steps you can take to improve your scores to help get you on the path to being eligible to lower your credit card interest rate.
4. Shop Around for Other Cards
Perhaps you have a great credit score already. And perhaps you’ve checked with your issuer and they simply won’t budge on the interest rates. Whatever the reason may be, it might be time to consider getting a different card. Shop around and see what cards might offer you the best rates. You may even be able to take this information to your current issuer to see if they can match it. Just make sure you think twice about closing any credit cards you already have, as this could negatively affect your credit age (and ding your credit scores in the process).
Lucy Lazarony also contributed to this story.