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Four Ways to Help Lower Your Credit Card Interest Rate

Written by Ilyce Glink on December 18, 2013 in Credit  |   2 comments

A high credit card interest rate can make it nearly impossible to pay off credit card debt. Fortunately, there are some steps you can take to help lower your interest rate and help make your credit card debt a little more manageable.

paying off credit card debtPaying off credit card debt can be difficult—and expensive—if you have high interest rates with which to contend.

High credit card interest rates can cost you thousands of dollars, especially if you’re carrying a high balance. According to Bankrate’s credit card minimum payment calculator, if you were to carry a $10,000 balance on a card with a 24 percent interest rate and only pay the minimum—$400—each month, it would take you more than 16 years and about $19,775 to pay off the debt.

If you were to carry that same balance on a card with a 12 percent interest rate and still pay only $400 per month, it would take you 11 years and about $13,267 to pay off the debt. That’s a five-year, $6,500 difference.

Credit tips: Steps you can take to help lower your interest rate

Fortunately, there are some simple steps you can take that may help you lower your credit card interest rates and save money.

After you’ve figured out how much interest you’re paying (it will be listed as the annual percentage rate, or APR, at the top or bottom of your credit card statement), it’s time to do some research.

Pull your credit score from each of the three national credit reporting agencies. You can do so either through each company’s website or through annualcreditreport.com for a small fee. Knowing your score may help you negotiate a better rate.

Step 1: Research what your APR should be based on your credit score. Once you have your credit score, check out websites like bankrate.com and credit.com to find out the APR that card issuers are offering to other consumers with your credit score.

Step 2: Find out what deals new customers are getting. Many card companies offer perks to new customers, and you can use these to your advantage. Find out what rates or deals your credit issuer is offering. Is it offering a single-digit interest rate for the first year? Bonus cash-back points? Airline miles? Make a list and keep it handy for your phone call.

Step 3: Call your credit card company. Once you know your credit score, the average APR offered to consumers with your score, and the perks your card issuer is offering to new customers, it’s time to get on the phone.

When you’re on the line with a customer service rep, explain that you’re after a lower interest rate. While he or she may say no the first time around, it’s important to be persistent. Using the information you have, make it clear that you know you can get a better rate elsewhere.

If the first rep says no, ask for that person’s identification and then ask for a supervisor. You may need to speak to a few people before your request is answered.

Keep in mind that you may not have any luck with your company, especially if you’ve been late on payments or have only been a customer for a short time.

Step 4: Consider other options. If your credit card company is unwilling to work with you, you may consider transferring your balance. Often, card companies will offer consumers single-digit APRs if they transfer a balance to a new or existing card. Keep in mind that this APR doesn’t last forever, and if you can’t pay the balance off in the given time period, you may find yourself paying even more interest once the time is up.

Getting a better interest rate on your credit card debt takes a little legwork, patience, and effort. Don’t feel discouraged if you can’t get it done in one phone call. Credit card companies lower interest rates every day of the year. Arm yourself with the right knowledge and you could save thousands of dollars.

Ilyce Glink is the author of ten books, including the bestselling 100 Questions Every First-Time Home Buyer Should Ask. Her nationally syndicated column, “Real Estate Matters,” appears in more than 125 newspapers and Websites, and her online “Ask Ilyce” columns are read by hundreds of thousands of people every month. She is a top-rated radio host on WSB Radio in Atlanta, the Home Equity blogger at CBS MoneyWatch.com, host of the Internet program “Expert Real Estate Tips,” managing editor of the Equifax Personal Finance Blog, and publisher of ThinkGlink.com.

2 comments

  1. Elaine says:

    If you try other credit card companies with lower interest rates, wouldn’t that lower your credit score? The more credit you apply for with inquiries could hurt you.

  2. Gene F. Cooper,USMC/Retired says:

    There is a problem that is in play that I have seen when moving around and in the financial arena. The melanin in my skin makes me subject to a much than less equal chance of receiving that which my credit history and score indicates. Case in point, my credit score was 752 at a point when I attempted to make a purchase of a new car for my wife. The score this finance company had set as a score for the interest rate they were going to charge me, would have had me paying an additional 14,000.00 over the life of the contract. The score that they claimed they went by was in the low 600′s, which was well below all three of the scores I had with each of the three major companies. I went to my credit union, barrowed the cash, paid them the cash price. They had even increased the length of the life of the contract from 60 months to 74 months. If I had late payments, or charge offs, and credit scores under 700, maybe they would have just cause. I really do not believe the credit system is set up for minorities.


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