The interest rates on credit cards can add up quickly, taking away hundreds of dollars or more annually. Getting lower interest rates or rate reductions on your credits cards can help you save money for other expenses that you face.
Unfortunately, too many people let their interest rates stay at levels that are higher than what they can actually get. Here are just a few tips on getting proper rate reductions so you can keep more of your money.
Credit Score
Before you can ask for rate reductions on your credit cards, the first thing you have to do is evaluate your current credit standing. This process starts by looking up your credit score. You will want to know your credit score first to see where you stand and if any past issues are still affecting your credit. By cleaning up any past problems, you will have more leverage to get lower interest rates.
Calculate Your Current Interest Rates
Take all of your current credit card statements and look at the APR (Annualized Percentage Rate). If you are having difficulty finding the APR, call your credit card company and ask what it is. Once you know what the interest rates are, you now have a baseline to work with your credit card company.
Shop Around for a Lower Rate
If you are in good standing with your credit card company, take a few moments to go to their website and see what rates they are offering new customers. It's quite possible that you'll find that new customers are being offered noticeably lower rates. If that is the case, call up your credit card company and ask for the lower rate. If you are in good standing, you will more than likely get the lower rate applied to your next monthly bill.
Debt Management Plan
If you are looking at lowering your interest rates because you are running up more debt than you can pay, then one effective alternative is engaging in a debt management plan. Most credit card companies have such a plan for those who want to pay off their cards. The advantage is that the interest rates are often lowered considerably, but you can no longer use the card. You should weigh all of your options before choosing this plan.
Utilizing the Debt-Snowball Method
One way to help lower your interest rates is paying down on the debt that you have accumulated. One popular and effective method is commonly known as the "Debt-Snowball". Essentially, this method starts by gathering up all the different debts that you owe and then work to pay off the smallest balances first while paying the minimum due on the largest. Once you have paid off the smallest debt, work your way up to the next one and pay that off.
These are just a few ways to help lower interest rates for the cards that you hold. Taking action today can save you hundreds of dollars or more whether you plan on keeping your credit cards or paying them off entirely.
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