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Credit cards often have high interest rates, but there are ways you can easily lower them, especially to pay less money on your debts.
A good part of the fact that there are many people who shy away from credit cards or, those who do have, end up in uncontrollable debt has to do with the high interest rates that they usually handle. That is why you always have to see the best way to reduce that rate to the minimum possible to take advantage of its benefits. Here are 4 ways to do it.
Negotiate with your credit card issuer
To negotiate with the issuer of your credit card, it is essential that, previously, you have done your homework and review certain information that supports that possibility. You can’t just call and say “I want a lower interest rate, give it to me”. In the restructuring process, you must have sufficient arguments to convince your lender. Here are the data you should take into account before starting the conversation:
- Check and improve your credit score. Your credit score is one of the primary factors for any lender to determine your interest rate. Simply put, a higher credit score means a lower interest rate. If your score is not the best, then you should work on it before looking for a lower interest rate, because your lender will most likely not give in to your request.
- Review the offer of credit cards from the competition. We are in a free market country, so there are times that an issuer can offer you a better offer to have a credit card. However, opening another account may not be the best for your finances, especially if your plastics handle annuities. However, reviewing what the competition can offer you can be a card that you play in your favor with your issuer. In the end, you will always have the option to consider switching.
Look for 0% APR balance transfer offers
If the deal stalls, you can still lower your credit card interest rate. If you’ve already reviewed other credit card offers, also look for those that have any 0% APR balance transfer promotions. The best cards usually offer 12 months or more of this offer. The interest rate will increase after that period. If you have a large salary, it is a good way to get out of debt.
Before opening a new account you should consider two things: first, that the balance transfer fees are not so expensive, because they could exceed the interest charges ; and two, that the credit card has a low interest rate by the time the promotional period ends.
Apply for a new credit card with a lower APR
The typical interest rate on a credit card ranges from 15% to 20%, depending on the card, its creditworthiness, and other factors.
If we add to this a good credit score, it is possible that you acquire a good low interest rate offer, so you would benefit from lower payments, if you do not manage to pay off your balances each month.
Apply for a debt consolidation loan
A credit card is convenient for many consumers, but that doesn’t mean it’s the best option. For people who do not have great control of their finances, the danger of indebtedness is latent with plastics, especially if they have high credit limits. If you already have current debt, a debt consolidation loan can be an excellent option to settle it.
Debt consolidation loans typically offer lower interest rates. Plus, fixed monthly payments and set terms can make budgeting easier as you pay down your debt.
Of course, to avoid getting into debt again, you need to stop using your credit card, especially if you cannot lower your interest rate.