Credit card debt is a significant expense in many people’s lives. One way to get debt under control is to lower your interest rate on your credit cards. Here are three tips to lowering that interest.
Transfer your balances
You may have received offers in the mail for cards with a low APR, or maybe even 0% APR. That means you may be able to get a card that charges you substantially lower interest, or maybe no interest at all. If you qualify for such a card, you can probably transfer your balances from a higher-interest card. Before you apply for a new card, be careful to read all terms and conditions. The reduced interest rate could only apply for a few months before skyrocketing to a higher rate, maybe even a rate higher than you’re paying now. It might also cost you money to transfer your balance. For instance, a card with a temporary 0% APR on balance transfers might charge a flat rate of 5% to transfer the balance. If you miss any minimum payments, your APR will probably jump. Finally, applying for a new card might temporarily harm your credit score. Carefully consider if a new card is right for you before pursing this option.
Talk to your lender
The easiest option is to just talk to your credit card issuer. If you’re happy with your card or don’t want to harm your credit score, Bankrate.com explains how to set up a game plan to request a lower rate. Basically, you should research what an appropriate rate would be, then call your company and explain you are getting better offers from other credit card companies. If your credit card company wants to keep your business, they will do what they can to lower your rate. If they say no, try asking for a supervisor or calling back later.
Raise your credit score
If you have a low credit score, you might not be getting any offers for new credit cards, and your lender might be unwilling to lower your rate. If that’s the case, the best way to lower your interest rates is to get your credit back on track. Make sure you make every payment on every account on time, and try to pay off some of your debt. When your credit profile improves, your lender may be more willing to adjust your interest rate. CNN has six tips on raising your credit score.