Lower Credit Card Interest: Considering the incessant rise in credit card interest rates, it is pertinent you learn how to lower it. However, the big question is, how do you lower the credit card interest rate?
If you are interested in lowering your credit card interest rate, then pay attention to this. In fact, this article is for you.
In this article, you shall learn about what is credit card rate interest. You shall also learn about some key ways to lower your credit card interest rate and lots more.
What is Credit Card Interest Rate?
A credit card interest rate is the price you pay for borrowing money. It is important you know that credit card interest rates drain you of your hard earned money.
Consideration on How to Lower Credit Card Interest Rate
Your credit balance in relation to the credit limit should be considered too.
Your credit balances on all your cards in relation to their credit limits.
Your payment history with special attention to any late payments also should be considered.
Keeping a good interest rate low.
Also, before you call with your request, you should check your credit reports.
Steps on How to Lower Credit Card Interest Rate
Below are some ways on how you can lower your credit card interest rate;
Negotiate Your Interest Rate
This is one way you can lower your credit card interest rate. Please note that the shortest route to lower credit card interest rate may be to simply ask.
Credit card companies see it as being less costly to grant a rate cut than it is to lose a customer to the competition.
Keeping good customers in place is easier and cheaper than acquiring new customers. As such, the credit card issuer may be ready to deal.
Do your Home Work (It pays to shop around)
Shop around and see if you can find better deals with competing credit card companies.
This is an important step on how to lower your credit card interest rate.
Transfer Your Balance to a Low Rate Card
Opening a new credit account can also help your credit score by increasing your available credit.
It is important to keep in mind that the lower interest rate is only available for a certain period of time. Typically it is around 12 to 18 months, after which it will increase to a higher rate.
So, this strategy can only work effectively if it includes a plan to pay down as much of your balance as possible while interest costs are low. Otherwise, all you did was kick the can down the road.
Refinance With a Personal Loan
Another way to lower your credit card interest rate is to refinance with a personal loan. The advantage of a personal loan is that it typically has a fixed interest rate for a fixed period of time.
If you have good credit, you should be able to obtain a loan with a lower rate. Banks are offering unsecured personal loans with rates in the 5 percent to 10 percent range. However, they tend to require a solid credit history for approval.
Alternatively, you can apply for a personal loan with any number of online lenders. These lenders have lower credit requirements and can issue loans quickly.
How to Improve your Credit Standing
Keep paying on time.
Pay down your balances.
Do not apply for new credit.
Some More Tips on How to Lower Credit Card Interest Rate
Once you have successfully locked in a lower interest rate, it is not quite time to sit back and celebrate.
That rate is still subject to a number of variables, most of which are within your control. Here are a few things to remember:
Pay your balance
Endeavor to pay your balance in full and on time. Late payments can cause interest rates to shoot up faster than a speeding bullet.
If the late payment was accidental and quickly remedied, do not be afraid to call your customer service representative.
You can dispute the elevated interest rate and campaign to have the additional charge removed. Just don’t forget our tips on friendliness!
Try not to Exceed 35% of your Credit Limit
Credit scores are determined, in part, by your ratio of available credit to “consumed” credit.
If you are maxing out your credit limit, it can negatively impact your credit score, which can increase your interest rates.
Check your credit score annually
This can be done using a government-approved, reputable source. This is smart both to arm you with knowledge that can potentially be useful in negotiations.
However, this is also to alert you to any issues. Issues like dangerously low credit or even possible cases of identity theft.
In a Nutshell
From the above, do not despair no matter what happens to your credit card interest rate. It may feel like you are doomed to accept whatever interest rate your credit card company slaps onto your account, but you do not have to accept it as fate. There is a way out.
No matter what your situation is, it is always possible to lower your interest rate and keep it that way. Do your research and speak up for yourself. You will eventually enjoy the pay off.