Slashing Your Credit Card APR

By • Aug 31st, 2011 • Category: Credit Cards, Miscellaneous

If you are looking to get out of debt, one way to do so is to lower your credit card APR. The APR is the interest that you are going to be paying on any outstanding credit card balance. The lower the APR, the lower the amount of money that you have to pay in order to repay your credit card loan in full.

What are some good ways you can lower your APR? The best way to do this is to simply shop around. Not every bank is going to charge 22 percent APR on your credit balance. A good idea is to look at credit unions as an issuer for your credit card. A Visa card issued by your credit union could carry a 9 percent interest rate as opposed to a 22 percent interest rate by Visa itself.

Being loyal to your credit card company can land you a low rate credit card. Most companies will allow you to lower your interest rate by making a certain number of consecutive payments on time. It usually takes anywhere from 18-36 payments to see a lower rate on your card due to a timely payment history. Paying on time also will increase your credit score no matter who your lender is.

A new credit applicant can negotiate a lower interest rate with a credit card company by leveraging a good credit score. Borrowers with higher credit scores can qualify for low rate credit cards that can come with other perks such as airline miles or rewards points. This is especially true in an economy like this where it can be hard to find borrowers who are reliable when it comes to repaying debts.

Have you been pre-approved for credit? If so, check to see if there is any introductory APR on your purchases. Assuming that you would have the balance paid off before the rate increases, it could be a good way to get a lower interest rate on your card. Once the introductory APR expires, you can shift your balance to another credit card. Just be aware of any other fees that might apply with this strategy.

Obtaining a higher credit balance sometimes will allow you to have a lower interest rate. A 10,000 dollar initial credit balance might apply for a lower APR because the bank, or card issuer, is going to want you to spend that money quicker. This might be the one time where it might be a good idea to get more credit than you might need.

Your credit card doesn’t have to be a financial mistake. There are cards out there that will have a reasonable APR and ways to lower your interest rate. Never be afraid to transfer balances if you find a card with a better interest rate. A smart consumer will always shop around for the best deal, so always keep your eyes open for a way to lower your credit card debt.

Richard Towler founded credit card comparison website Click 4 Credit in early 2007 to help consumers cut through the banks marketing hype and compare features side by side objectively on credit cards before applying online. The network has since expanded to include savings accounts and a US credit card comparison website.

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