Log InJoin 

How To Lower Credit Card Interst Rates

How To Lower Credit Card Interst Rates

Having the lowest interest rate possible is like having money in the bank or paying yourself first. An interest rate of 16.9% as opposed to one of 8.9% will take significantly longer to pay off the balance and cost hundreds of dollars more in the long run. Getting the lowest interest rate on your credit card isn't luck and steps can be taken today to make it happen.

Credit card companies want customers who are dependable and use their credit cards in ways which make them money. It's not just a matter of buying something and paying it off every month. Additional steps can be taken to show your credit card issuer that you deserve a lower interest rate. Reducing overall debt, making timely payments, increasing your FICO credit score and maintaining a minimum balance can all strengthen your position when negotiating a lower interest rate.

Various factors work in concert to make you look like a great credit risk that any company would want to keep happy. If you have three credit cards with $10,000 limits each for combined total credit of $30,000 but are carrying balances totaling $25,000 you'll be considered at high risk for default. As such, your FICO credit score will be lower and creditors will reference that when determining interest rates on lines of credit. Riskier customers pay higher interest rates.

Paying off a balance every month also does nothing to make credit card companies money. While it is definitely the smart thing to do it lessens your negotiating position because it actually costs them money to maintain a credit account yet they make no money by charging interest because you carry no balance from month to month. One strategy is to carry a nominal balance for a period of months then ask for a lower rate and go back to paying the balance in full.

Carrying a balance isn't the whole picture however. Making payments on time is tracked in credit reports and when used in conjunction with lower overall debt load shows perspective creditors that you're a financially responsible individual who knows how to manage lines of credit. Seniority can also play an important role in negotiating a lower interest rate if the company wants to keep long-term customers.

However, the quickest and simplest way to lower credit card interest rates may be moving to a new credit card issuer. Due to intense competition for credit card customers many credit unions and smaller regional banks offer additional incentives such as lower interest rates. Often people get married to their credit cards because they've had them forever but sometimes the best thing to do is to move on to a company the treats its customers better.

Image by: Stargazer95050