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How to Lower Your Credit Card Interest Rate

Credit cards provide instant access to borrowing that can make it easier to manage your monthly expenses and afford larger purchases. High interest rates can however make carrying a balance on your card expensive and paying off what you owe difficult.

That’s why getting your credit card interest rate as low as possible is in your best interest. (See what we did there?)

Card Smarts: Lower Your Credit Card Interest Rate

For many of us, a credit card can be a lifeline, allowing us to afford necessities as we need them, rather than having to wait for a paycheck to come in, and making it possible to spread the burden of larger expenses over several months.

High — and increasing — rates on many credit cards make carrying a balance from one month to the next more expensive, and make it easier to get in over your head if you cannot keep up with ever higher payments.

Avoiding unmanageable credit card debt takes discipline and good financial habits, but it also involves making wise decisions about the rate you agree to pay on your credit card. Let’s take a look at what drives card issuers to charge more, and offer some simple steps on how to get a lower interest rate on a credit card.

Building Good Financial Habits

Credit cards offer quick and easy access to instant credit as you need it. All that on-tap convenience however comes at a price. Rates on credit cards are always significantly higher than what you would pay on a personal loan or most other forms of borrowing from a bank or credit union.

That shouldn’t be a problem provided you pay off your card balance quickly and avoid accumulating long-term debt by practicing good financial habits. Here are a few tips:

Budgeting

Know how much you spend and when you spend it. While a credit card prevents you from running out of money, it does not protect you from spending too much. Knowing how much you earn and creating a realistic plan to spend it (and then sticking to it) is the first step to financial security.

Pay Your Bills on Time

It’s difficult to overstate the importance of paying your bills on time. A habit of missed or delayed payments damages your credit score, exposes you to late fees and higher interest rates, makes it harder to borrow money in the future, and almost always results in long-term debt. Start out right and stick to it: pay your bills on time.

Manage Your Debt

Do everything you can to avoid getting into debt, and take the debts you do have seriously. Make a plan to pay them off as quickly as possible. Debts not only eat into your monthly budget, but they also reduce your ability to save for the future or to invest in important opportunities. And debt costs you more the longer you keep it.

Save

The opposite of debt is saving, and saving pays you more the sooner you start and the longer you do it. Saving is critical to protecting yourself from unforeseen events like an unexpected loss of income or emergency expenses. It’s also the key to securing your and your family’s future and to reaching your financial goals.

Start setting aside anything you can today. Begin with an emergency fund to cover unexpected expenses, then move to longer-term goals like retirement, a new house or car, or your children’s education. These are predictable expenses you know are coming up, and it makes sense to plan for them.

Steps to Lowering Your Credit Card Interest Rate

With solid financial habits in place, you should be in a good position to avoid accumulating credit card debt, and you should be building up a track record that makes it likely card issuers will offer you more favorable rates. That said, if you are not happy with the rate you are being charged on your current credit card, here’s what you should do:

1. Take Stock

Start making the case for a better credit card rate by evaluating your current credit situation.

Take a look at how much you owe on each card and when payments are due, as well as any grace periods your issuer might extend for late payments. Understand how much interest payments (and late fees) are adding to your balance each month. Also, determine how much your debt is taking out of your budget and how it prevents you from saving or spending on other necessities.

Doing so will ensure you know how much you owe each month and when it needs to be paid, and how much you stand to gain by reducing your balance. You’ll be better able to evaluate card issuer offers and/or assess the benefits of switching to a new card.

2. Check (And Fix) Your Credit

A big part of taking stock of your financial and debt situation is to check your credit. You can easily view your credit score online and request a free report. Be sure to get credit reports from all three major credit bureaus, and check them for:

  • Inaccurate personal information

  • Incorrect records on missed payments or outstanding debts

  • Any loans, credit cards, or accounts you were unaware of

Contact each card issuer immediately to correct any discrepancies. If you discover outstanding bills or accounts sent to collections, reach out to the merchant or lender directly and arrange payment. The same goes for potentially fraudulent unpaid charges or credit accounts.

It might take a few months for any changes you make to feed through to a higher credit score. However, a good score will play a big role in securing you a lower credit card rate, so it might be worth the wait.

3. Research Competitors’ Rates

Once you’ve got your own financial house in order, it’s time to do your homework!

Equipped with your knowledge of the rates, fees, and charges you’re earning on your current card(s), take a look at the terms being offered on cards from other lenders. Consider the following:

  • Annual percentage rate

  • Annual fee

  • Credit limit

  • Balance transfer fees

  • Interest-free introductory offers

  • Rewards programs

Look at offers from banks and other lenders, including local credit unions. You might be surprised by the specially tailored benefits and lower rates credit unions are able to offer members because of their not-for-profit status.

Also consider how much you would be paying in credit card interest along with the other costs of doing your banking, including maintenance fees, ATM charges, and required minimum balances. You may find the cost of maintaining a credit card and checking account at a local credit union like Listerhill is less than at your current card issuer.

4. Call to Request a Lower Rate

Few people seem to realize that if you want a lower rate on your credit card, you can usually call up your card issuer and ask for it! Of course, it helps to be well prepared with a strong record of making payments on time and managing debt, an improved credit score, and some examples of similar cards that offer better rates and terms than you are getting now.

Stay focused on the interest rate you are being offered. Don’t be distracted by offers that extend your credit limit, increase your rewards, or offer other benefits that do nothing to save you money on payments. If you don’t get the results you want on your first call, don’t be discouraged. Call back later and you might find a more sympathetic ear.

The credit card market is extremely competitive and issuers know they need to keep up with other lenders. You can make this work to your advantage if you are patient, persistent, and well-prepared.

5. Consider a Balance Transfer

If your current card issuers can’t match the offers you are seeing for similar cards elsewhere, it might be time to consider changing your card, especially if you can also lock in lower fees or higher interest on your checking and savings accounts.

If you’re carrying a larger balance than you can pay off on your existing card(s) then you should think about making a balance transfer onto your new card. In addition to a lower overall interest rate, look for cards that offer:

  • A generous credit limit

  • Low or zero balance transfer fees

  • An interest-free introductory payment window

  • Rewards for transferring a significant amount onto your card

For example, both Listerhill’s Signature Rewards VISA® and Platinum VISA® cards offer no annual fees, no fee for cash advances, and no fee to transfer balances from your existing credit card. You’ll also earn a great competitive interest rate on either card, but our VISA® Signature Rewards card offers you 2% cash back on all purchases.

The Credit Union Advantage

If you’re on the lookout for a better deal on your credit card, there are a lot of advantages to joining a full-service local credit union like Listerhill. You’ll find a friendly welcome from financial experts who will take the time to understand where you come from and where you want to go in your financial journey.

You’ll also find a member-focused organization that rewards its members with:

  • Fewer fees on everyday financial services than most commercial banks

  • Quality credit cards with competitive rates and no annual fees, including our Platinum VISA® and Signature Rewards Cards VISA®

  • Higher dividends and yields on your savings and certificate accounts.

For stability, community, and simplicity, it’s hard to beat Listerhill. And it’s hard to beat the generous terms on our credit cards and other products or the rewards we offer our members for using them.

To find out how we can best support you in your mission to lower your credit card interest rate, click below!

See Our Low Rate Credit Cards


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Frequently Asked Questions

  • What if I prefer to make my payments through a pre-authorized automatic payment arrangement (ACH)?

    Please contact TruHome at 844-203-3642 to set up automatic payments or visit here to set them up yourself.

  • What if I prefer to make my payments through the Listerhill Mobile Banking app or Online Banking?

    Unfortunately, when the transfer occurs, mortgages will not be displayed on our app or in online banking, but we are working to bring that functionality ASAP.

    In the meantime, please visit here to view all mortgage information and payment options.

  • What if I prefer to make my payments through the "Pay Your Loan" link on the Listerhill website?

    Unfortunately, after the transfer you will not be able to use this link to pay your mortgage. However, you can visit here to view all mortgage information and payment options.

  • What if I prefer to make my payments over the phone?

    You can reach TruHome's payment center by calling 844-203-3642.

  • What if I prefer to make my payments by mail or through Bill Pay at another financial institution?

    As a national servicing company, TruHome will probably be in your other financial institution's list of payees who accept electronic payments. If not, you can set up the account using the address below:

    TruHome Solutions, LLC

    P.O. Box 219958

    Kansas City, MO 64121-9958