How to Reduce Credit Card Interest Rates

By: Ronnica Rothe

There are several steps you can do on your own to reduce credit card interest rates. By being wise about how much you pay on each credit card, you can earn lower interest rates which can save you hundreds of dollars as you continue to pay off your debt.

If you decide that your interest rates are too high, you could directly ask the creditors to lower you interest rates. Your creditors will only be willing to do this if you have a good history with them and have demonstrated financial strength. This requires that you not have made late or missed payments and have paid more than the minimum balance due.

If you do not think that the creditor will be willing to give on your interest rate, there are steps you can take to convince them too. First, determine how much you are able to pay on your credit cards each month. Choose one card to concentrate on that has the highest interest rate, and put the balance of what you can pay towards it after you already allocate to each of the other cards the minimum payment plus five dollars. Adding the additional five dollars to each car will keep the credit card companies from penalizing you for being a "slow pay." By focusing the majority of your allotted money towards the one credit card, you will be aggressively paying down the money that carries the highest interest.

Once you have aggressively paid on this card for four to six months, contact the creditor and request a specific interest rate that is lower. Now that you have demonstrated that you have the financial capability of paying more than they thought, remind them of this and offers you have received to transfer your balances to lower rate cards. You should be able to lower your interest rate three or four percent which can save you significantly.

Once you have done this successfully, you can choose to focus on another card to get that interest rate lower. Or, you can work on completely paying off the original card. By following this type of pattern, you will allow yourself to start to escape debt.

The above strategy assumes that you have resources to be able to pay more than the minimum payments on your cards. If this is not the case, you will have to find another way to reduce credit card interest rates. One way that might be beneficial to you is a debt management plan through a credit counselor. Creditors are much more willing to lower interest rates on these types of plans when they see you are serious about getting out of debt. Contact a reputable credit counselor if you would like to learn more.

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