How to Reduce Credit Card Interest Rates

If you are like most people who carry a balance on their credit card, you need to know how to reduce credit card interest rates. Many people believe that you have to take the interest rate the credit card company is willing to give you, but that is not the case. All you need to do is follow these six steps to reduce your credit card interest rate.

1. Call and ask. Start by making a phone call to your credit card company and asking them for a lower interest rate. Inform your credit card company of any offers you have received with a lower interest rate and ask them to match it. Point out that you have been a good customer for them and have had a good business relationship. Typically, if you have these two things, your creditor will lower your card’s interest rate. However, if you have less than a perfect history with your creditor, they may decline your request. If this is the case, there are three things you should do to improve your credit score before you call your credit card company back.
2. Start by paying down some of your debt if you tend to carry a higher balance on your cards. If you keep your balance at or near your credit limit, then you are considered a high risk. The higher the risk you are, the more you are going to pay in interest.  So get that balance down.
3. Pay more than the minimum. By paying more than the minimum payment you are showing your creditors that you are a trustworthy customer and deserve a lower rate. Again, it comes down to the risk that you are to your creditor. If you pay only the minimum payment, then the credit card company will think you are low on funds. This makes you a higher risk to them and you will pay for it.  So if you want to reduce credit card interest rates, start paying more than the minimum payment.
4. Always pay your bill on time. Paying on time makes you a much smaller liability to your creditor and they will reward you with a lower interest rate. Show your credit card company that you are a low risk by making payments on time. You should be rewarded with a reduced interest rate.
5. Then call again. After six months of paying down debt, paying on time and paying more than the minimum payment, call your credit card company back. You are going to go through the same process as before. Make sure to point out the progress you have made on your credit score and that you are less of a liability now. They should find a way to reduce your credit card interest rate.
6. Switch cards. However, sometimes you just cannot get your interest rate lowered with your current credit card company. If this is the case, start looking for a better credit card. Once you find one, transfer your remaining credit card balance to a card with a lower interest rate. 

Whether you get your interest rate reduced with the first call or you have to wait a few months, you will find yourself paying less on interest if you follow these guidelines. It may take work, but it will be worth it in the end. Now keep up the good credit habits you have established and enjoy your reduced credit card interest rate.

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