How to Get a Lower Interest Rate on Your Credit Card

Are you tired of high interest credit cards? I certainly am. Along with millions of other American consumers my credit card interest rates have vaulted to staggering heights even though I haven't made a late payment since college.

The reason credit card companies charge so much interest is because they can get away with it. In the past few decades, a number of credit card companies have been successful in eliminating laws that once capped those interest rates. Without limits, credit card companies can charge pretty much what they feel like which is why consumers are seeing interest rates of 25%, 36% or even higher. For a consumer hanging out there with a high credit card balance, these incredible interest rates make it that much more difficult to pay off a credit card.

But, just because your credit card interest rate is high doesn't mean it has to stay there. With a little bit of work and determination, it's possible to get a lower interest rate on your credit card. Here's how it's done.

1. Make a dedicated effort to improve your credit score first. Lowering a credit card interest rate starts with improving your credit score. This means making payments on time, making larger payments if possible to lower your debt ratio, and not opening up any new credit cards. Managing your credit debt more wisely will put you in a better position for lowering the interest rate when the time comes.

2. Watch for a promotional low rate. Credit card companies run all sorts of promotions on a regular cycle. Most of the promotions offer up some kind of super low introductory rate for a year, it's best to ignore these since they are usually front-loaded with a hefty "processing" fee. The promotion you DO want to watch for is one that offers a fixed interest rate between 8-12% with no fees involved. Once one of these fixed rate options becomes available, it's time to make your move.

3. How to negotiate a lower interest rate. When my bank recently offered a fixed credit card interest rate of 8% to new card holders, I was on the phone lickety-split asking for the same sort of deal on my card which had been sitting at 14% for the past ten years. Not only did I get the better rate, the bank practically doubled my credit line as well. Negotiating a better interest rate is as easy as asking for one especially if you are a long term card holder. And if the credit card company or bank waffles about giving you the lower rate? A bit of bluffing is OK too, as in "XYZ just gave me a card at 10% so I'll be transferring my balance there."

How well you've improved your credit situation will ultimately determine what your new interest rate will be. An improved payment history and a phone call is usually all it takes to lower your credit card interest rates by a few percentage rates. Paying those credit cards off completely and then asking for a lower interest rate is what will net you the best deal of all.

resource:
http://www.msnbc.msn.com/id/7600124/