If you have credit card debt, you may have options to lower how much it costs you.
- Credit cards often have extremely high interest rates.
- These high rates can make it difficult to pay off your debt.
- Many borrowers have options to lower the interest they pay on their cards.
Credit cards are notorious for their high interest rates, so it’s generally best to avoid carrying a balance on your cards whenever possible. But whether you’re opening a new card or have an existing one you’re trying to pay off, you don’t necessarily have to accept your high rate as a fact of life.
In fact, you may have several options to reduce the cost of credit card loans. Here are three possible techniques that might work for you depending on your situation.
1. Ask your lender for a rate reduction
One of the easiest ways to lower the interest rate on your current credit cards is to simply ask your card issuer to work with you. You can make this request by calling the customer service number on your credit card, explaining why you need or want a rate reduction, and asking them what they would be willing to do.
Card issuers often want to keep your business, so if you let them know you’re thinking of switching to a different card company or doing a balance transfer, they may be eager and willing to lower the rate on your current card. . Likewise, they also want you to continue to pay your bill on time, so if you explain that you’re facing financial problems, it may also be possible to lower your interest rate to help you.
In general, you’re more likely to have good luck with this approach if you’ve had the card open for a long time. However, you may have to call more than once before someone is willing to help you. And, in some cases, the card issuer will accept only a temporary rate reduction, but that can still help keep costs down.
2. Refinance your credit card debt
If you can’t lower the interest rate on your current credit card debt by asking your card issuer for a break, you have another option worth considering. You can apply for a personal loan and use the loan funds to pay off your card.
Personal loans typically come with a lower interest rate than credit cards, so it’s possible to significantly reduce borrowing costs with this approach. As a bonus, your personal loan should have a payment schedule determined in advance, so once you refinance, you’ll know exactly when your debt will be gone and how much it will cost you over time.
3. Consider a balance transfer
Finally, another solution to lowering your interest rate might involve transferring your expensive credit card balance to another that offers a better deal.
Many card issuers want to earn your business and provide incentives to transfer your current balance to your existing card. This comes in the form of a 0% introductory rate on balance transfers for a limited period of time. You could, for example, find many cards that offer a 0% rate for 12 or 15 months if you transfer a balance.
You’ll usually have to pay a balance transfer fee to do this. But the fee is usually a small percentage of the amount being transferred. Since you’ll be enjoying months of 0% interest later, a balance transfer could still pay off.
You should explore each of these three options to decide which one makes the most sense for your situation, so you can say goodbye to high credit card interest charges for good.
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