How to get low interest rate credit cards

Ever wondered how to get a credit card that isn’t charging you an arm and leg in interest for that frappucinno?  Believe it or not  it may be easier than you think.  There are really only two times when you may be trying to get a favorable interest rate on your credit card:  When you are looking for a new card or with one you currently have.  Let’s go through these scenarios and offer up suggestions.  Most importantly in either situation is to have a strong credit rating.  The better your credit score the more leverage you have to qualify for reduced rates.

Looking for a new card

If you are either new to credit cards or an ol’ timer looking for another card to add to your collection the first thing to consider is why do you want a new credit card.  Are you looking to make a big purchase that you are confident you will be able to pay off in a relatively short period of time or are you trying to transfer a balance from another card to a lower rate card?  In either of these instances it may behoove you to shop for a 0% introductory rate credit card.  Just be very careful and understand that once the introductory period is over your rate will typically jump to at least the national average if not more.  Keep in mind that these “offers” are meant to lure new business to the credit card companies and although they can be a great tool in your financial arsenal try to pay them off as soon as you can.

Wanting to reduce the interest rate on an existing card

1. Strategy if you are current on your payments

Reducing the interest rate on a credit card you already have starts off with your objective.  How low do you want or need the interest rate to get to?  Why do you need an interest rate reduction?  Now that you have a reason let’s talk strategy.   Remember, without you as a customer they don’t make money.  If you are current on your payments look around and see if there are better deals to be had with another company.  Once you’ve found some call your current credit card company and let them know you can take your business elsewhere and get a better rate.

 2. Strategy if you are late on your payments

If you are having a tough time and have missed payments then call your credit card company and ask if they have a hardship program to help reduce your payments and/or interest rate for a period of time so you can catch up.  Communication is the key when dealing with creditors.  If you let them know that you are not trying to skip out on paying them but just need a little help they are usually responsive to that.

Helpful hints

Remember, without you as a customer they don’t make money.  When negotiating it’s good to keep in mind that you catch more bees with honey.  Meaning, make sure that your conversation is painting the picture of a “win-win” scenario between you and your credt card company.  If at first you don’t succeed try again with a different person at the credit card company, try to talk to a supervisor and whatever you do try not to get upset.  This will most likely raise your stress level and a high interest rate credit card is never a good reason to have a heart attack.

What type of reduced interest rate can you expect

The ranges can vary wildly but it’s not unheard of to reduce your interest rate by 1/3 just by placing a quick call to your credit card company.  We’ve even seen some creditors willing to reduce interest rates to 0% for a period of time to match what is going on the market place.

To see the effects of long term credit card balances on your overall financial health check out our “Life Calculator”.