As if credit card debt isn’t stressful enough, high interest rates make credit card debt even more overwhelming by raising monthly payments and making it even harder to pay off. According to U.S. News, the average credit card percentage rate is between 17-24%—and rising. The good news is that you can take steps to lower your interest rates and your overall financial burden.
High interest rates are most often linked to a low credit score, so making payments on time and reducing non-essential spending can help you begin to raise your score and strive toward lower interest rates. This of course won’t help in the present if you’re struggling to pay high monthly payments. Fortunately, there are several ways to navigate this, the first of which is to call your lender and simply ask them if they can reduce your interest rate. Cardholders who are in good standing and make consistent payments stand a better chance of getting approval on this. However, you may also be able to persuade them to lower your interest rate if you are struggling financially.
Financial experts suggest researching what other lenders are offering in interest rates before calling your lenders. Just like when you ask for a price match to a competitor in a store, lenders may likely lower your interest rate to be more competitive and to keep you as a customer.
No matter what you say or how much research you’ve done, lenders can still say no. Don’t be discouraged. In that case, there are other options to pursue, such as switching to a new card with a lower interest rate. While you’ll still have to pay off your previous debt, all new purchases will have a better interest rate.
A balance transfer, which can offer zero interest for 18 months or more and allows you to transfer debt from one or multiple cards, is another way to mitigate high interest rates. Note, transferring balances often includes additional fees, but the opportunity to consolidate debt and pay it off with no interest is often worth it. However, you will want to try and pay off your balance before the no-interest grace period ends.
If you’re still struggling with paying off your credit card debt, you may want to consider a debt management program. A personalized debt management plan can provide you with a more manageable budget to help pay off your loans including consolidation into one payment and possibly a lower interest rate.
Once you’ve succeeded in lowering your interest rates, you can focus on paying down your debt and working toward a brighter, financially healthier future.