Looking at the credit card debt for the past two years, it is obvious that the current economic climate has affected credit cardholders similarly. More people are taking out credit card debt to cover their living costs, and with the high credit card interest rate, the debt has become costly for most to carry. At a national average of 18.7% and the lowest APR rate of 15.25%, the increased interest rate has affected the ability of consumers to manage their credit card balances. All is not lost because you can attain a lower credit card rate. But how do you get there?
6 Techniques To Reduce Your Credit Card Interest Rate
Managing a large credit card balance is hard without including the high-interest rate. Implementing these techniques can help you better manage your finances and overall credit portfolio.
1. Make Timely Payment
The consequences of missing out on bill payments are just as worse as just late fines. Late payments reflect on your credit report affecting your credibility as a borrower. Banks and other lending providers are inclined to provide competitive rates to trustworthy borrowers, thus making a habit of paying your bill on time. An impressive credit report will attract competitive APRs, allowing you to choose the lowest interest rate.
2. Build A Diverse Credit Card History
Banks are always in competition with one another to offer their clients the best interest rates on credit. However, lenders will first look at some factors to determine whether one is a good candidate for the offer. Apart from a good credit standing, lenders review your credit mix (different types of credit)and length of credit history. If you have an old card it could come in handy to prove a lengthy credit record.
3. Keep Your Ratio Low
A credit utilization ratio is the best way to keep your credit card ratio low. Review your credit limit and how much you are using. How close is your spending to the limit? The secret is to avoid overcharging the account; keep your balance within 30% of your card limit. You can use a calculator to determine what the amount of limit in use and maintain a low ratio.
4. Apply For Bank Transfer
In a bank transfer, the balance is moved to a new credit card with a possibly lower rate. Some banks will require you to pay a fee to facilitate the transfer. However, some companies offer 0% introductory APR for over a year allowing you to save money on debt repayment.
5. Request for It
Are you a long-standing credit cardholder with a clean credit history? Then you have a good chance to get a reduced credit rate. Credit card issuers often offer help to customers by offering lower rates on their credit. You can secure a lower interest rate through negotiations if you have an excellent credit history.
6. Monitor Credit Report
Your credit card report directly influences your interest rate; thus, you need to keep tabs on transactions on the account. Without regular checks, you might miss mistakes and unauthorized accounts that could drag down your credit card report. To monitor your report, you can visit the major credit bureaus offering consumers free reviews once a year.
Bottom Line
Amid the rising credit rate, consumers are not entirely helpless. Sure, you may not be able to change the current economic situation, but credit card interest is a great place to start. A lower credit card interest rate can help you improve your credit score and eliminate debt. Use these techniques to manage your finances and watch your finances take a turn.