In just a few decades, credit cards have transitioned from a convenient luxury into an important part of modern life. It is scarcely possible to imagine a world without credit cards fueling the overwhelming percentage of all purchases. While the benefits of credit cards can’t be denied, it must also be acknowledged that along with these benefits come some significant drawbacks. Perhaps the most damaging of these drawbacks is is the tendency of some credit cards to have interest rates which are too high to effectively manage.
According to BalanceTransfers.com, “The impact of high interest rates can be felt over the course of an entire lifetime.” Some unlucky credit card owners pay many times the amount of their initial purchase because of an unwieldy rate of interest. As these rates climb higher, customers become more vulnerable to late and missed payments; creating a spiraling cycle of ever higher interest rates and larger bills.
Think of it this way; imagine that your 23% interest credit card balance is $1000, paying just the minimum monthly payment, it will take you 123 months to pay off your balance. During this time you will have paid $1,262.28 in interest!
Now imagine that your card has an interest rate of 13%. For the same $1000 balance, you’ll be finished paying in 101 months and you’ll have paid just about half of the interest of the other card. Finding credit cards with lower interest rates really starts to matter over time.
It may surprise you to learn that credit card companies can and do lower interest rates for certain customers. Although these deals aren’t advertised, you may find that your card provider is willing to grant you such a deal. Think of it from the perspective of your card issuer; they certainly want to keep you as a paying customer rather than losing all of your current and future business. If this means lowering your interest rate, you’ll find that many credit card issuers are willing and able to do so. To learn how credit card companies give certain customers lower interest rates, see the following link.
In the event that your credit card provider isn’t willing to lower your interest rate, you still have another option to shrink those interest payments. This option is that of finding a new credit card with a lower interest rate and the option to transfer existing balances over. Using this strategy, you may be able to pay off your high interest card completely, while saving money with your new card’s lower interest rate. For more info on these kinds of balance transfers, have a look at the following link. Remember to pay off your remaining balance before the introductory rate ends.
Lowering your interest rate can also be accomplished by carefully monitoring and protecting your credit score. When you use your available credit wisely, you open up new and better opportunities. Although you may be paying a high rate today, if you scrupulously safeguard your credit profile, you’ll soon be hearing from credit card providers offering more attractive interest rates.
One way that you can lower the interest rate on your credit card is to understand the specific rate you’ll pay for each type of transaction. You may not be aware of this, but credit card companies charge different rates for different kinds transactions even though these transactions are made using the same credit card. For instance, the rate of interest on a credit card cash advance is typically higher than a simple credit card purchase. There isn’t much that can’t be bought with a credit card today, so why bother with a cash advance at all?
Lowering your interest rate can also be achieved by keeping the lines of communication with your credit card provider open. Remember, card providers are corporations and these corporations are staffed with people just like you. There is absolutely nothing written in stone about what your provider can offer you in terms of interest rate relief. If you’re going to miss a payment, or be late with it, give your provider a call and let them know. Missed and late payments can lead to higher interest rates, but they don’t necessarily have to.
Credit cards play a powerful role in our society but the only real power these cards have is what we, the consumers, give to them. Card issuers want to make as much money as possible; it’s only natural. Many of these companies get away with charging astoundly high rates of interest because their customers don’t know what their options are. Achieving the lowest possible interest rates on your credit cards begins with being an informed, intelligent consumer.