Credit Cards with Low Interest Rates

How Can You Find a Credit Card with Low Interest Rates?

Interest rates on creditcards are high making paying down the debt more difficult. High rates only mean wealth for merchants but bring challenges for the consumer who carries balances from one month to the next.

The recommendation is to avoid creating a large balance. Instead keep these low and manageable so you can afford to repay the debt each month incurring no interest.

If the balance transfers to the following month, it only continues to grow from that point resulting in a cycle of debt that cardholders today have trouble breaking free from unless you can figure out how to get the rate reduced.

Actually, negotiating a lower interest rate with the merchant can be a relatively simple process. You can also consolidate debt, a more time and effort-intensive process, but it can often be a more suitable solution. In either situation, the result can be lower rates, reduced balance, and much less stress.

Credit Card Interest Rates

A reasonable rate in today's market, incredible as it might seem, is 20 percent because it's below average. Some card companies will charge higher rates than the average interest. Issuers determine the rate based on a prospective cardholder's credit score.

If your score ranges above "750, the rate could drop to 15 percent." For those with a score as low as "580, the rate could rise to 30 percent." How do you find relief from high rates? When clients present with excellent credit, rates can fall to 15 percent.

According to the CFPB- Consumer Financial Protection Bureau, small traditional banking institutions and credit unions offer lower rates than the larger entities and card companies.

On the other hand, secured cards, store credit, cash-back, and travel rewards have higher rates. Please go to kredittkortinfo.no/lav-rente/ to learn how to get low interest on credit cards.

Strategies to lower interest rates on credit cards

Calling the issuer directly is the most straightforward approach to lowering a card's interest rate. However, you should be fully prepared before contacting the merchant with a full understanding of the account and your credit profile and have competitive offers from other companies to present to the issuer.

These are regular people like yourself so it's important to speak freely, kindly, and be patient but avoid being anxious, nervous or impolite. The card company wants to work with their cardholder because negotiating assures them of on-time, consistent payments.

You want to document the conversation and ask for the determination in writing. It's important to be clear about the reason you're calling, concise, and upfront. If it seems the company is unwilling, let them know you're willing to transfer to another card and close your account.

Also point out your positive traits particularly if you're financially responsible and explain any extenuating circumstances that warrant a lower rate.

Balance transfer credit cards

Another method for lowering interest involves transferring high-interest credit card balances to an interest-free balance transfer card. The positive is the interest rate is lower straight away allowing you to pay the principal down quickly in a set period of time if you qualify.

Usually, a prospective cardholder needs a score of roughly "680 +" to obtain this card. A downside is the fee to transfer the balances which can range up to 5 percent of these balances. With some offers, the cost is reduced to approximately $10.

Reading the terms and conditions thoroughly is critical to understanding, especially the fact that the introductory period has a term date of roughly 18 months. If the balance is not paid by the time this expires, the rate returns to the average.

For those who qualify and establish a payment plan for the designated introductory period, this is the ideal method for debt consolidation or refinancing high-interest credit cards.

Debt consolidation option

When choosing a debt consolidation loan, it combines several unsecured bills into a single monthly installment, with a term of up to five years for payoff. These loans will carry an interest rate as low as 5 percent or capped at 36 percent based on creditworthiness, financial standing, and outgoing debt obligations.

If The Interest Rate Reduction Request is Denied

If the merchant denies the request to negotiate a lower rate, you can politely ask for the reason for the denial. Becoming informed will allow you to establish the appropriate steps to improve the situation so you can try again down the road. The recommendation is to wait between three and six months.

The creditor is often more flexible with the second attempt, particularly when you've improved your circumstances. Contact the card company a few months after the initial rejection and request the negotiation to lower the rate again. If you've made consistent installments on time during this period, it will likely play in your favor since it shows financial responsibility. If you've received competitive offers, bring these into the negotiation.

Request a temporary break

If the merchant continues to reject the idea of a lower interest rate, ask the issuer for a temporary break, like a year of a roughly three percent reduction.

If you've made improvements with a rise in your credit score, use that to show you’re worthy of the risk, that you can make payments regularly and on time.

A nonprofit credit counselor can help

A perk of nonprofit credit counselors is their connection with creditors and their ability to help negotiate. These professionals work between you and the merchant to help reduce the interest rate and help you get out of credit card debt with practical management strategies.

This is often a last-ditch effort to negotiate with the credit card company but the counselors will offer the most suitable solution while also assessing your financial circumstances.