How to lower your credit card interest rates
The biggest fear for any debtor is the spiralling cost of interest rates by their credit card companies on their present debt balances. Sometimes, these rates can even rise to a massive 30% APR. All such companies take our signature on a legal document which authorises them to push increases in interest rates, subject, of course, to legal restrictions imposed by local, state, and federal governments.
For those credit card users who wish to maintain a zero balance all the time will not be bothered by rate changes. But others who maintain a revolving balance will struggle to reduce their debt. For that reason, this article will focus on various techniques that will help with management of revolving debt and also lower card rates.
Three effective techniques to lower your credit card interest rates
1. Hardship Program
If you are struggling with your debt then the best thing you can do is to ask your creditors whether they have any “hardship program”. Not all the companies offer this option but many do. Usually these programs last no more than three to twelve months.
Usually, for the first six months the creditor manages to cut down existing interest rates in half or even down to 0%. Its only disadvantage is that you won’t be able to use your credit card during that period. This is in fact a blessing in disguise if you want to get rid of your debt.
2. Get used to cards that maintain relatively lower rates
First step is to compare interest rates of various credit cards. Standard cards usually have basic features but offer lowest rates. People often buy them for their regular APR, which is considerably lower than those of rewards and travel cards. But lookout for the rates after the promotional period gets expired, anything below 10% is considered to be on the lower range.
3. Transfer balance to a low interest rate credit card.
There is another way to lower your credit rate. It can be done by transferring a balance transfer to a card which has low interest rate. For this reason choose 0% APR credit cards, such cards will help you reducing your debt.
There are two key points which should be kept in mind while moving your balance successfully:
a) Stop racking up balance on cleared card
Many people made the cardinal mistake of pilling up debt again on the cards whose debt have been shifted on to low interest rate card.
b) Read the fine Print
Make it your habit to read all the terms and conditions and know well in advance the balance transfer fees on the new card. You should know how long will you be paying the low interest rate and when that period expires what will be the regular rate applicable on your debt.