Every day, it seems, we receive a credit card application in the mail offering an introductory interest rate that seems too good to pass up. On the other hand, the credit cards we already have may have started out with a low rate, but within a few months it zoomed up to 20% or more. If your credit card's interest rate is too high for your liking, here are some steps you can take to lower it:
Call the credit card company and simply ask to have your card's interest rate lowered. In many cases they will do so, especially if you've had the card a long time and have maintained an excellent payment history.
Conversely, if you contact a credit card company and they refuse to lower your rate, consider using another card (if you have one) to pay that credit card in full, and don't use it again. However, if you've had the card for a long time, do not cancel it. Your lengthy history with this company is important to your credit score.
If you have only one credit card, check online for other cards offering low interest rates or consider any application received you may have received in the mail with an introductory rate of 0% for six months or longer. Apply for the new card and pay off the credit card company that wouldn't lower your rate. But be sure to pay off the new card within its introductory-rate timeframe, before the regular interest rate takes effect.
When applying for a credit card, it's important to read all the terms and conditions. Remember, too, that rates may only be fixed for a certain amount of time. Ascertain the low- and high rates before applying for any card.
With the economy in its current state of flux, some banks may not be willing to offer low-interest-rate cards. Research credit card companies online and compare rates and terms. If necessary, call them to determine their current interest rate and whether they intend to raise it in the near future.
If you have a good credit history, you may be able to reduce your interest rate significantly. For example, consideration will be given to you if you've had the card for a long time, if you have a high credit limit, or if you have no current unpaid balance. The good news is that you can lower your interest rate by as much as 3% or more if you fall into these categories. Credit card companies generally do not want to lose your business, so the more you press them on the issue, the more likely they'll be to lower their good customers' rates.
Here's one more useful tidbit: whenever the Federal Reserve lowers interest rates, most credit card companies will lower the rates on their cards automatically. The stock market also plays a role in how credit card companies determine their interest rates. Depending on your credit history, you may be able to obtain an even lower rate from your card issuer. So contact them; you won't know until you ask.
