How to Lower High Interest Rates on Credit Cards
The average credit cardholder has an interest rate over 15 percent. High interest rates equal higher monthly payments, which make it more difficult to reduce the balance and ultimately pay off the credit card. However, you don't have to settle for high credit card fees. If you have good credit and have been a loyal customer, you're eligible for a lower rate. In fact, you might qualify for a zero percent interest credit card.
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Instructions
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Make on-time payments. Not everyone qualifies for the best credit card rates, and if you want to obtain a lower rate, you've got to demonstrate creditworthiness. Maintain a remarkable payment history with all your creditors. Paying a single bill late, or missing one payment, can disqualify you, and can even result in an interest rate increase.
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Ask the credit card company to review your account. Credit card companies occasionally review cardholder accounts. This is how they determine whether you're eligible for a rate reduction or a spending limit increase. If you like, contact your credit card company and ask for a review of your account. Express your desire to receive a lower interest rate.
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Apply for a low-rate credit card. Some credit card companies are stubborn, and they refuse to lower high interest rates. In this instance, it's time to shop around for a new credit card company. Compare different offers and choose a balance transfer credit card that features an introductory zero percent or low interest rate (see Resources below). Submit your application, and once you are approved, transfer your high-rate balances to the low-rate credit card.
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Reapply once your credit improves. Again, rate reductions are based on credit history, and a poor credit history lowers your odds of getting a reduced interest rate. Take key steps to improve your low credit score: Reduce your debts, limit credit inquiries, pay your bills on time and pay collection accounts. Attempt to increase your score by 30 points, and then request a lower interest rate.
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Tips & Warnings
After transferring your balance to a low-rate credit card, don't cancel the old credit card. Closing credit accounts lowers your credit score, so it's best to keep the account opened.
Resources
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