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.