Ways to Get Lower Interest on Credit Cards


If you are one of the lucky ones who have managed to maintain your credit card payments throughout this sluggish economy then you might be able to get lower interest on them. There is no magic formula to get lower interest on credit cards. It takes some up front preparation to make sure that you present yourself as the best credit risk possible. If you are successful in getting your rates lowered, it will save you a lot of money in the long run and possibly get you debt free. Here are a few ways to go about doing this.

You have a much better chance of getting a lower rate when you meet certain conditions. It is highly unlikely that any credit card company will lower your rate if you are a high risk. Those who have the best chance for rate reduction are those who make payments on time, pay more than the minimum each month, have a low debt-to-income ratio, have a good credit score, and are not carrying a large balance on the card. Also, if the credit card is one from a sub-prime lender then it may not be possible to lower the rate. Sub-prime cards are typically marketed to those with low credit scores.

Prepare yourself by obtaining your credit report. In the United States, you can get a free credit report once every 12 months from the 3 major credit reporting agencies (Experian, Equifax, and TransUnion). Use the central clearinghouse at FinancialBusinessGuide.com to obtain these reports. These companies have other options where you can pay to get your report more frequently. You want to identify anything on your report that will have a negative impact and kill your chances of getting a lower interest rate. It is a good idea to pull your credit report to look for other issues like erroneous information and fraudulent activity.

The simplest place to start after getting your report is to just call your creditors. Call them only if everything on your report is in order. Their phone number is usually on the back of the card for questions that have nothing to do with your bill. Take care to have all information in front of you before you make the call such as the current prime rate, the current service agreement for the card, and your latest bill. Of course, you can expect that the person you speak to will respond with a negative reply when it comes to lowering your interest rate. That’s because the first person you speak to usually has no authority to do what you are asking. If this happens to you then you can politely ask to speak to the supervisor.

If you can’t get your rate lowered, shop for balance transfer deals. Doing a balance transfer to a lower interest credit card has been a very popular way to reduce debt expense. However, make sure you look at the fee that will be charged by the new card company for the actual transfer. Also consider that each time you apply for a card, a bank inquiry transaction will appear on your credit report. Too many inquiries of this nature could actually hurt your overall credit score.