Lower Credit Card Interest Rates – 4 Tips

If you have more than $5,000 in credit card debt with relatively high interest rates, lowering your interest rates would provide you with significant financial benefits, easily lowering your payments by $100s per month. Here are 5 tips for getting lower interest rates.

Tip #1: Actively transfer balances to lower rate cards:

The easiest way to get lower rates is to transfer your balances to competing credit card companies who have extended you offers for better rates. Even a lower rate to the tune of 5% can make a huge difference in your monthly credit card debt payments and is worth doing. Try to avoid offers that charge a balance transfer fee or an annual card fee. But, even in those offers might be excellent options for you if you stand to save significantly on your monthly interest payments.

Tip #2: Request current lenders to lower your rates:

Place a call to your current credit company and request a lower rate. You may find that they are receptive, especially if you tell them you are comparing their best rate to offers you have received from their competitors. For a successful bid to have them lower your rates, it is best to have a credit score of at least 675. In any case, it is definitely worth a try.

Tip #3: Consider alternative loan options:

If you own a home, you may be able to borrow against the equity in your home at a significantly lower rate through an equity line of credit. An equity line of credit or similar financial instrument uses your home as collateral, so the lender is able to offer you a better interest rate than does your credit card company – even if you have poor or fair credit. If you do this, you can pay of your high-interest credit card debt and end up with net lower monthly payments.

Tip #4: Improve your credit score:

If your credit score is too low to qualify for better interest rates, there are concrete steps you can take to improve your score. Even an improvement of 40 or 50 points can save you $100s per month in debt payments. To begin, first pull your free credit report (go to Annual Credit Report Request Services online) and find out your score. Then, take the necessary steps to improve your score.

You can significantly lower your monthly credit card debt payments by qualifying for lower credit card interest rates. Transfer your balances to lower interest cards, ask your lender for a better rate, consider a home equity line of credit, or do whatever it takes to improve your credit score. It makes dollars and sense to do so.

Less Than Perfect Credit Plus Equity in Your Home Equals Credit Card Debt Elimination

You’ve probably heard the news stories that say you have to have a near perfect credit rating these days if you want to qualify for any type of loan or mortgage. And if you’re one of the millions of people concerned about elimination of your credit card debt the thought of getting a bill consolidation loan probably flashed through your mind for a second and then you forgot about it because your credit rating is already in the toilet.

One of the main reasons it’s difficult to get a bill consolidation loan for the elimination of credit card debt is because most people generally use their cards for things like clothing, trips, food and gasoline – none of which can be considered assets that the bank or lender could use for collateral. However, if you’re a homeowner, you may be able to qualify for that consolidation loan, even if your credit rating is less than stellar.

Let’s say you have $25,000 in accumulated plastics debt, spread out over 5 or 6 cards, and your total monthly payments are $800. And let’s say you have $25,000 in equity in your home. Refinancing your home will give you the money you need for the elimination of your credit card debt yet it will only raise your monthly mortgage payment by less than $200. Not only have you erased your debt but you’ve improved your debt to income ratio – which also makes your credit rating look better. Most lenders would be happy to make a loan like this.

Before taking any major step to eliminate your credit card debt your best course of action is to consult with a reputable credit debt reduction service. They can help you look at all the different options available to you and make the best decision for your own personal financial future.