16. Reduce Credit Card Interest Rates

How to Lower Credit Card Interest Rates
James Woodley

Most of us have limited resources to work with, and need to make our money stretch as far as possible. When it comes to our credit cards, finding the best interest rates possible will have a very positive impact on our financial picture. Here are some tips on how to lower credit card interest rates and minimize their impact on your monthly budget.

Before you can have any meaningful discussions of how to lower the rates you pay for credit card interest, you must first have a firm grip on what you are currently paying. Pull out the agreements on each of your credit cards and create a spreadsheet that will tell you at a glance what rate of interest you are paying on each of your current cards. Don't be surprised if you find that you are paying a higher rate of interest on those department store credit accounts. Also, you are likely to find some variance in the interest rate you are paying for your major credit cards as well. Also, document any cards you have that will allow you to transfer balances from other credit card accounts.

Next, contact the credit card providers that have the higher interest rates. Let them know you are reviewing your current interest rate on your account and want to see if they can match the lower rate you have with another account. Often, if your credit rating is sound and your payment history is consistent, you can obtain a lower credit card interest rate. If one is extended, then make sure you will get something in writing to document the new rate, as well as confirming that it is a permanent change and not just a promotional offer that will expire in a few months.

Should you find that the cards with higher rates of interest do not want to work with your for some reason, then contact those who have extended you a lower rate of interest and confirm they will allow you to transfer balances from other accounts. If so, transfer the balances and then close your higher interest account. In the long run, you will save enough money on interest to allow you to pay off your cards more quickly.

As a rule, financial institutions do not automatically lower credit card interests rates, simply because you are a good customer. Often, it will require a proactive call by you to get the ball rolling. Once you have done so, you may be surprised how many institutions are willing to extend a lower rate of interest just to keep your business.

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