Your Complete Guide to Getting a Lower Credit Card Interest Rate Today
If you’re struggling under the weight of credit card debt, you’re not alone. The average American household carries over $6,000 in credit card debt, and that means paying thousands of dollars in interest over several decades if you only send in the minimum payment each month. Getting a lower credit card interest rate can help make paying down your debt more manageable.
There are several steps you can take to get a lower interest rate. Each person’s situation is different, but in general, you can follow these tips to bring down your interest rate and pay off your debt a little faster.
1. Build Your Credit Score
Your FICO score is going to follow you around until the day you die, so now is the time to make sure your credit score is as high as it can be. To do this, make sure you pay every bill on time, every time — and in full, whenever possible. Credit reporting agencies track this behavior and reward it by improving your score. If you don’t have much of a credit history, you might keep an eye out for a chance to opt into UltraFICO scoring, which takes into account your banking habits as well.
2. Ask for a Lower Credit Card Interest Rate
Doing your very best to keep your credit score high will make you look good when you call your credit card company and ask for a better interest rate.
Yes, that’s right. Sometimes all you have to do is ask.
When you make that call, be prepared. Look over your payment history so you can explain to the representative that you have X number of on-time payments in the past number of years. It’s even better if you can honestly point out that you’ve never been late or short on a payment. You may also want to mention your latest FICO score (if it’s high!) as additional evidence that you’re a great customer.
If showing off your reliability as a customer dedicated to paying their bills isn’t enough, ask to speak with customer retention. This is the department that works to convince people not to cancel their cards. When you get someone on the line, explain that you are planning to do a balance transfer to a credit card company with a lower interest rate. This should get their attention, and they may offer you a lower rate to keep you as a customer.
Pro Tip: Try calling customer retention and asking for discounts on other bills, too. This often works for cable or telecom packages to get a slightly better deal for a six- to 12-month period.
3. Find a Better Deal Elsewhere
Not everyone will get a lower credit card rate just by asking. If your company won’t budge, it’s time to look for a new credit card. Specifically, be on the lookout for a card with a 0% balance transfer fee, and make sure the interest rate on balance transfers is lower than your current rate. You’ll also want to make sure there’s no annual fee for the card. When you find a good balance transfer deal, use it to pay off your old credit card, which will move your debt to the lower interest card. Then work to pay the balance off as fast as possible.
Don’t Get Discouraged!
If you’re having trouble finding a lower credit card interest rate, don’t give up! Continue working as hard as you can on Step 1 to bring down your debt and bring up your credit score. In time, this will make you more attractive to credit card companies, and you may be successful in your quest in a few months. Keep at it, and eventually you’ll prevail in your quest to pay down your debt and enjoy greater financial freedom.