In December the Federal Reserve decided to raise interest rates by a quarter point. So what do rising interest rates mean for consumers? For starters the interest rate on things like savings accounts will start to increase. But the cost to borrow money will also increase. If you have a credit card with a variable interest rate then you might see your rate creep upwards.
So what can you do to keep your interest rate low during a period where rates are rising? Just follow these simple tips to get a lower interest rate on your credit card in 2016.
Improve Your Credit Score
The best way to show that you are a trusted borrower is have a high credit score. This will allow you to receive the most competitive interest rates on some of the most sought after credit cards. Start by getting your free credit report from AnnualCreditReport.com. You are allowed one free report every 12 months. This report will give you a good idea where you need to make improvements to help improve your score. The biggest things that hold back peoples credit scores is the total amount of debt they have compared to their available credit and making late payments. Fix both of these items and you will have leverage with the credit card companies.
Find Competitors Offers
One thing that will always be true about the credit card industry is that they are extremely competitive with each other. They value your business and will do just about anything to keep it. Before you make an attempt to lower your current interest rate find out what other cards are offering you. This will let you go into the call prepared.
Call Your Credit Card Issuer
Now that you have started making all your payments on time and lowered your credit utilization you can give your credit card issuer a call and talk to them about getting a lower interest rate. If you can show that you use your card frequently and are paying it off regularly then you should have a good chance at success. Use the competitor’s offers to your advantage. Simply tell them that you have several offers for 12.99% from other issuers and you would like to lower your current 17.99% interest rate. If they decline you can always call back and talk to another customer service agent.
Look for a New Card If Needed
After several unsuccessful conversations it might be time to either cancel the credit card or just stick it in your sock drawer. Look for a card that can offer you similar benefits and also give you the interest rate that you are looking for. Just be aware that applying for a new credit card will mean a hard inquiry into your credit report. This isn’t advisable if you are looking to do something big in the next year like purchase a home.
