5 Clever Ways to Lower Your Credit Card APR (That Actually Work)

In addition to impacting your credit score, having a high balance on your credit cards can also subject you to hefty interest charges. Credit card interest rates are typically expressed with an annual percentage rate (APR), including interest and fees, for borrowing money. In some cases, your APR could be as high as 24% or more, depending on your credit card.

Here are five legitimate and effective ways to lower your credit card APR (and maybe even boost your credit).

If you feel like your APR is too high, getting it lowered could be as simple as asking. If your financial institution agrees to lower your rate just because you asked, you’ve saved yourself some money in interest charges for little to no effort.

Keep in mind that it won’t always play out this way. It’s important to prepare yourself for a negotiation with your bank by knowing the ins and outs of your financial situation. 

It also wouldn’t hurt to have data on hand to justify why you deserve a lower APR. This could include your on-time payment history and how long you’ve been a cardholder. If the representative you speak with still won’t budge, call back and speak to someone else. Sometimes it’s all about the person on the other end of the line.

It could also make sense to restart with a different credit card entirely. If you know you’re going to be carrying a balance on your card because of large upcoming purchases, a new credit card with a lower interest rate could save you money.

Start by comparing credit cards to see what you might qualify for. It’s possible you might find one with a lower APR than you currently have. You’d still have to pay off the balance on your existing card, but any new purchases could go toward the card with the lower interest rate and save you money in the long run.

If you want to ditch your old card entirely, you’ll typically need to get a balance transfer card to take advantage of lower interest rates. Keep in mind that canceling a credit card could negatively impact your credit score since it will reduce the overall age of your credit accounts.

It could be worth your time and research to compare credit card offers and find a card with an introductory balance transfer offer. A balance transfer involves moving your balance from one credit card to another. There’s often a fee for doing a balance transfer, which could range between 3% to 5% of the amount being transferred.

Many of the best balance transfer credit cards offer an introductory 0% APR on balance transfers for a limited time, usually between 15 to 18 months. Depending on your situation, it could be worth paying the balance transfer fee to avoid paying interest on your balance during the 0% introductory offer period.

This strategy could give you enough time to completely pay off your balance or at least make some headway without having to worry about interest charges. If you want as much time as possible to avoid paying interest by doing a balance transfer, consider the longest balance transfer credit cards. 

A lower APR credit card will likely save you money on interest. But consider the stance of your financial institution for a second and why you might have a high APR in the first place.

Lenders are in the business of giving money to people on the basis that it’s going to be paid back. It’s a risky business since they’re basically trusting customers to give them their money back according to set terms. One of the ways a bank can estimate how risky it will be to lend you money is to check your credit score and other related factors.

If you have a high credit score, you might get a lower APR. Conversely, lower credit scores typically get higher APRs. To help improve your credit score and potentially qualify for lower interest rates, apply these financial strategies:

• Always make on-time payments
• Don’t carry a high balance
• Don’t close your oldest credit accounts
• Don’t open too many new accounts
• Use different types of credit

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Similar to transferring your balance, gathering your debt together with a debt consolidation loan could help lower your overall APR and save you money on interest. The difference is that debt consolidation could work for multiple balances at once, while a balance transfer only works for one balance at a time.

For example, let’s say you have three credit cards with high balances. You could use a debt consolidation loan to pay off all three cards and then have just one larger monthly payment. It could make sense to do this if you end up with a lower overall APR than before. However, it wouldn’t make sense if you’re not able to find any good options from lenders when you shop around.

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If you have to carry a balance on a credit card, it makes sense to try and save money on interest. From simply calling your financial institution to negotiate a better rate to using a balance transfer credit card, the right strategy will depend on your situation. You have a few options to get out of debt.

While credit cards are notorious for their high interest rates, some let you avoid paying interest for a period of time. If you’re planning to make a large purchase, check out our review of the best 0% APR credit cards.