A cardholder can do many things to lower their credit card interest rate. These things include calling the credit card company directly to negotiate a new rate or being approved for a new card with a lower rate and transferring the balance from the old card to the new lower interest rate credit card.
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While credit cards, like those found with the credit card chaser tool, can be a very useful financial tool, but they can cost the cardholder a lot in interest. Some credit cards, specifically store credit cards, are notorious for high interest rates. Lowering interest is just one way a person can take an active role in controlling their credit card debt. Websites like Suze Orman’s, give great advice on other ways like negotiating with the credit card provider and improving a credit score to get a lower interest rate.
What is a credit card interest rate?
Every month a credit cardholder does not pay their balance in full the remaining balance is charged interest that is then applied to the outstanding balance. The amount of interest charged each month is determined by the credit card’s interest rate.
Also know as an annual percentage rate, or APR, the interest rate varies by credit card. A person’s interest rate depends on many things including the credit card provider, but the main factor that determines a person’s credit card interest rate is their personal credit score.
A good credit score is one of the most important things an adult in the United States today can have. A person’s credit score can determine whether they are approved for a home loan or a cell phone. Even some employers make a person’s credit score a factor in deciding who gets a job. A good credit score can open a door to many great opportunities and a bad credit score can quickly shut that door.
Usually, the higher a credit cardholder’s personal credit score, the lower their credit card interest payments will be. Even if a cardholder has a low credit score and therefore higher credit card interest rates, there are still things the cardholder can try to lower their credit card interest rates.
What are the first steps I can take to lower my credit card interest rates?
According to Daily Finance there are quite a few things a credit cardholder can do to lower their credit card interest rates. The first and most obvious step is for the cardholder to find out how much they are paying each month in credit card interest. It is very surprising the number of people that are completely unaware of just how much credit card interest they are paying.
Even if the cardholder remembers what their interest rate was when they first received their credit card they should still take another look at their monthly statement. It is not uncommon for a credit cardholder’s interest rate to be raised without them noticing.
After finding out what their credit card interest rate actually is the cardholder should then see if their credit card company is offering the same credit card at a lower interest rate to its new customers. Only by knowing facts like these will the cardholder have a good chance of negotiating a better interest rate with their credit card provider.
There are other key figures that the credit cardholder should look for as well. These figures are the national average credit card providers are charging for interest rates and how much credit card interest someone with their credit score pays on average. The cardholder can easily find the national interest rate average through an Internet search engine.
Will having a better credit score lower my interest rate?
If the cardholder has a low credit score, they can easily get their credit card interest lowered by improving their credit score. If the cardholder does not know their credit score, they can find it easily.
There are many websites that offer to give the cardholder their credit score for free. Often these sites require some type of membership and often give only one of the cardholder’s credit scores. Everyone technically has three credit scores. These scores come from the three major credit score bureaus Equifax, TransUnion, and Experian.
It is very important for someone to know all three of their credit scores because they might have high scores at two and not realize that their credit score at the third is lower for some reason. A person cannot begin to fix their lower credit score until they know that it actually exists.
Can negotiating with my credit card company lower my interest rates?
The next step is for the cardholder to actually call their credit card provider and discuss the issue. This step is the most intimidating for most people and is should not be. Credit card companies are not as unreasonable as most people think they are and are often very willing to work with their cardholders to find a solution that makes everyone happy.
If a lower rate cannot be agreed on and making payments has become a real burden to the cardholder, the credit card company might be willing to discuss some type of forbearance or special repayment plan. The bottom line is no one really knows what their credit card company is willing to do until they ask.
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