Easy Ways to Lower Your Credit Card Interest Rates

Posted on June 10, 2019

Are you carrying around way too much personal debt at the moment?

Unfortunately, you're not alone! The average Canadian has almost $30,000 in personal debt, not including the debt associated with their mortgage. That includes more than $4,000 worth of credit card debt.

One of the reasons so many Canadians struggle with credit card debt is because of the credit card interest rates attached to their accounts. A high-interest rate can make it impossible to put a dent in your credit card debt, no matter how hard you try.

You can make high-interest rates a thing of the past by doing your best to bring your rates down. Some people aren't aware of this, but there are steps you can take to chop your interest rates down if you're willing to work at it.

Here are several easy ways to improve your financial situation.

Find Out What Your Credit Card Interest Rates Are

Do you know what your credit card interest rates are right now?

This might seem like very important information, but many people—especially younger people—don't pay attention to the interest rates on their credit cards. They spend without paying their interest rates much mind.

This can present a big problem. The average credit card interest rate in Canada sits at around 14 percent, but there are some people with interest rates as high as 20, 25, and even 30 percent.

If you have interest rates that are anywhere close to 30 percent, you need to work on getting those rates lower. Rates that high make paying down debt an uphill battle.

Take a look at your credit card statement the next time you receive one to see where your rates stand. Or call your credit card company and have them tell you what your rates are.

There is a chance your rates are about as low as they're going to get. But if they're sky high, you'll want to do something to bring them back down to earth sooner than later.

See What Rates Other Credit Card Companies Offer

Once you know what your interest rates are, you can start the process of trying to lower them. Begin by checking out the rates offered by other credit card companies.

This will help you in a variety of ways. It will:

  • Let you know if the rates on your current credit cards are too high
  • Give you some leverage if you decide to try to negotiate with your credit card company to bring your rates down (more on this later!)
  • Provide you with some options if you find that transferring your credit card balance might be in your best interest (more on this later, too!)

It might surprise you to see how low the interest rates for other credit cards are. It'll shed some light on how high your rates are and give you some hope for your financial future.

Call Your Credit Card Company and Ask for a Rate Reduction

Generally speaking, you should try to avoid calling your credit card company at all costs. Who wants to spend all afternoon sitting on hold with a credit card company?

When it comes to your credit card interest rates though, you should call your credit card company early and often to try and get your rates reduced. Even if your rates aren't that high, it never hurts to ask if a credit card company would be willing to bring your rates down.

Before you call your credit card company, do your homework on other cards and see what interest rates they offer. If they offer lower rates than your current company, use that to your advantage.

Don't be afraid to come right out and ask for an interest rate reduction. Get yourself ready to say something like, "I would like to reduce my credit card interest rate. Can you please tell me how to go about doing this?"

Be direct but don't be too pushy. The customer service representative on the other end of the phone is a person like you. If they can find a way to bring down your interest rate, they'll do it.

If you resort to being rude or yelling at the customer service rep, there's a good chance that you're not going to get the results you're looking for. You're better off being polite while discussing your options.

Figure Out How to Build Your Credit Score

Do you have a low credit score?

If so, your credit card company is probably not going to agree to lower your credit card interest rate for you. The lower your credit score is, the more of a liability that they will see you as. They won't lower your interest rates in this case.

There are lots of things that you can do to bring your credit score up if you find it's limiting your ability to lower your interest rates. You can:

  • Check your credit report and correct any errors that you find on it
  • Increase the credit limits on your credit cards
  • Make sure that you're paying all your bills on time every month
  • Do what you can to bring your credit card balances down through a debt consolidation loan or another type of personal loan
  • Keep credit cards that you've paid off off open

If you're able to increase your credit score, it'll put you in a much better position to negotiate. They'll see that you're trustworthy with credit and extend you better offers.

Consider Transferring Your Credit Card Balance

If you call your credit card company and they deny your request to lower your interest rates, you might not think you have any other options. You might feel as though you're hopeless with regards to paying credit card debt down.

There is one great option that those with high-interest rates have. They can apply for a new credit card with another company and transfer the balance from their old credit card without their high interest rate to it.

There is often a fee associated with performing a balance transfer. That fee will be nothing compared to what you would have to pay if you were to continue chipping away at your current credit card balance.

Look for a credit card with a 0 percent introductory rate that accepts balance transfers. This type of credit card allows you to pay down the balance of your credit card every month without hitting you with interest charges.

You'll feel like you're finally making some real progress when you transfer a balance to a credit card with a low interest rate or no interest rate at all. At some point, an interest rate will kick in, but when that time comes, you should have almost your entire credit card balance paid off.

Continue Negotiating Your Interest Rates Over Time

Did you get turned down for an interest rate reduction by your credit card company?

Don't give up! Continue to call them over and over again to let them know how beneficial an interest rate reduction would be to you.

As long as your credit score doesn't take a nosedive, you should be able to convince them that you're a good candidate for an interest rate reduction eventually.

You should also continue to call your credit card company in the future even if they do extend a credit card interest rate reduction to you. Unless they provide you with a rate that's well below 10 percent, there is always room for improvement.

Credit card companies always compete with one another to provide people with the lowest rates possible. Use this to your advantage! Always shop for the lowest rate and keep in touch with your credit card company.

Don't Let High Credit Card Interest Rates Keep You Down

Are you shelling out hundreds or maybe even thousands of dollars every month to pay off credit card debt? This is something that has become far too common in Canada.

Put this practice to an end by getting control of your credit card interest rates. By doing some research and being persistent, you can slash your interest rates and make it easier to pay your bills.

By reducing your rates by just a percentage point or two, you can make your credit card debt more manageable. It won't be long before your debt is gone and you're able to live a better life as a result of it.

Take a look at the credit cards available to you today to compare the interest rates that are out there.

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