How to Procure a Lower Interest Rate
If you are more than frustrated to see your credit card balances going virtually nowhere each month while you struggle to pay them down, then you’re not alone. Millions of credit card holders are dealing with high interest rates that make it nearly impossible to pay off their credit card balances in a reasonable amount of time.
Luckily, you do have options, provided your credit is healthy. If you have consistently paid at least the minimum payments on your credit cards, and paid them on time, then you are in a great position to obtain a much better interest rate and save yourself hundreds, if not thousands, of dollars in finance charges every year.
Contact your Credit Card Company
The first – and arguably the easiest – way to get a better interest rate is to simply call your credit card company and request one. Most credit card holders can lower their interest rates on their current credit cards if they plead a case with their credit card company. Simply threatening to transfer your balance to another credit card will often produce results, as well. But remember: you must have a pristine history with your current credit card company if you expect to see results.
Transfer your Balances
If your credit card company isn’t willing to offer you a lower interest rate, then you may want to consider transferring your balances to another credit card with a lower interest rate. There are many types of cards you may want to look for, including those with low, promotional APRs.
Promotional APRs can save you loads on finance charges, but beware of associated balance transfer fees, which can be quite costly. Also, pay attention to the duration of the promotional APR to decide if the savings are worth your while.
Otherwise, simply look for a credit card with a lower, fixed interest rate that will allow you to pay off your balances and save on finance charges.
Pay off Higher Interest Rate Cards First
If you find yourself in a position where you can not get a lower interest rate credit card or balance transfer, then you’ll want to line up your credit cards and find the one with the highest interest rate and pay that off first. Pay the minimum payments on the remaining cards and use the extra money to pay off the high interest rate card first. Then, continue down the line with the same game plan until all of the cards have been paid off.
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