How To Lower Your Credit Card Interest Rates

by Silicon Valley Blogger on 2012-02-0737

Many debtors have admitted that one of their biggest concerns is for their credit card companies to raise their interest rates on existing debt balances. I’ve actually heard of reports in the past of card rates that would go up to a whopping 30% APR. Some ask, is this legal? To the extent that it abides by the Credit Card ACT, it is legal, because as consumers, we all signed a little document with our credit card application that stated that our credit card companies can do whatever they want with the interest rates.

But count me in as one of those credit card users who aims to maintain a balance of zero. I think it’s safe to say that if you don’t carry a balance, then interest rates may not be that big a deal to you, but for those who do have a revolving balance (around half of all households), finding ways to reduce that debt should be a priority.

So I went ahead and compiled these tips to help you cut down on that revolving debt as much as possible. The following methods may help you lower your card rates.

5 Effective Ways To Lower Your Credit Card Interest Rates

1. Ask about a hardship program.
The first method is to call each of your creditors and ask if they have a “hardship program.” Not all consumers realize that creditors offer such programs to clients that may be cutting it close when it comes to paying their credit card bills each month. You want to call the number on the back of the card, express your concern that you may not be able to pay your bill next month, and ask if there is any type of hardship program they can offer you. Typically, these programs last from 3 months to 1 year.

In many cases, the creditor is able to cut the existing interest rate in half or even take it down to 0% for the first 6 months. The only drawback, for some, is that the use of your credit card is suspended. In this situation, you’ll not be able to continue using the card. However, if you want to get out of debt, this is exactly what you need to do anyway. A close friend of mine once asked for a hardship program (relating to their American Express rewards card) and received a 0% interest rate for the first 6 months, and 9.9% for the remaining 6 months of the program. This was a pretty good deal.

2. Become familiar with credit cards that sport relatively lower rates.
Start out by comparing credit card interest rates. Cards with lower rates are typically standard cards with stripped down features. Their main selling point is their regular APR, which isn’t normally as high as those for rewards or travel cards. Keep your eye on the rates you’ll get after any promotional periods expire — any rates that are under 10% may be on the lower end of the range.

If you’re currently shopping for a card, it makes sense to review the APRs of various credit card categories out there. I found this handy table of Credit Card Rate Averages from that gives us some idea where rates stand at this time.

Credit Card Category
Last Week
6 Months Ago
National Average 14.91% 14.95% 14.88%
Balance Transfer 12.60% 12.71% 12.73%
Low Interest 10.40% 10.40% 10.73%
Cash Back 14.45% 14.61% 14.16%
Business Cards 13.13% 13.13% 12.91%
Rewards Cards 14.73% 14.78% 14.50%
Airline Credit Cards 14.54% 14.54% 14.31%
Student Credit Cards 13.77% 13.77% 13.77%

Note: Teaser, introductory or promotional rates have not been incorporated in this list. maintains an ongoing tracker for such rates. Updated as of Jan 31, 2012.

3. Perform a balance transfer into a low interest rate credit card.
Consider lowering your credit card rates by completing a balance transfer to a low interest credit card. Such cards (such as 0% APR credit cards) can stop you from growing your debt. Here are some balance transfer credit cards that may fit the bill:

Credit Card
Interest Rate
Transfer Fee
Citi Simplicity Visa 0% for 18 months on BT, 0% for 18 months on purchases 3% transfer fee or $5 minimum
Discover More Card 0% for 18 months 3% transfer fee
Discover More Card – No Balance Transfer Fee 0% for 12 months $0 transfer fee till 7/2012
Slate From Chase 0% for 15 months No balance transfer fee for the first 30 days
For more balance transfer options, check out our full list.
H&R Block At Home Tax Services

Be aware that there are two key components to moving your balance over successfully:

  • First, you want to make sure you do not start racking up a balance on the card which you’ve already cleared (e.g. whose balance you’ve transferred elsewhere). Many consumers fall into this trap. Once they clear the debt on one card, they start charging it back up again. The whole purpose of performing the balance transfer is to get a lower rate so that more of your money can go towards the principal balance. If you charge up the original card again, you are going to remain in debt. You’ll need to change your card usage habits in order to make a difference with your debt.
  • Secondly, you should read the fine print on your card. Look at the balance transfer fee on the new card and read its terms carefully. Find out how long you’ll be paying the lower interest rate. You’ll also want to know what your card’s regular rate will be once the intro rate expires. Transferring to a 0% APR credit card that goes to 24% in 6 months is NOT a good deal, unless you can pay it off in 6 months; and for many people, this is highly unlikely. If you feel that you will always have a balance, then it’s probably better to go for a card with a comparatively lower rate over time (a persistently low, average regular APR), even if it’s a bare bones card.

4. Get credit counseling.
Another option to reduce your interest rates is to call a credit counseling agency. While there are many agencies and outfits out there that will help you manage your debt for a fee, make sure that you start on this route by dealing with a legitimate, non-profit credit counseling agency.

You may want to consider signing up with a debt management program rather than with a debt settlement company (check the pros and cons of debt settlement). With a debt management program, you’ll rework your payments to your creditors in some capacity. If you do decide to work with such a program, you’ll also want to make sure that the company you are dealing with does not “hold” on to your first or third payment (to creditors) for their fee. Doing so will cause you to fall more than 30 days behind on your cards, which will have a negative impact on your credit report.

So where can you go for help for your debt situation? Here’s a short list of resources you can check:

From the list above, I’d like to point out that the National Foundation of Credit Counseling (or NFCC) can help you find a legitimate credit counseling agency. They can direct you to an agency that is licensed in your area and that will provide you with the proper educational and counseling services. I know debtors who’ve used this method for their credit cards and who were subsequently able to cut each interest rate by up to 10%.

5. Maintain good payment habits.
Finally, you’ll get the best rates from your credit cards by managing your debt well. Here are a few quick ideas for lowering your rates:

  • Check your FICO credit score to know where you stand. An excellent credit status may give you some room to negotiate with your issuer. If you’re a good customer, talk to your credit card company about possibly cutting your credit card’s interest rate, especially if it’s above the average APR.
  • Pay more than the monthly minimum or better yet, pay your entire balance per month if possible.
  • Never skip a payment and never be late with it either!
  • Don’t exceed your credit limit and avoid cash advances like the plague — they’re expensive!

So if you’re having trouble addressing your credit card debt, know that there are avenues you can take to work things out!

Created October 4, 2009. Updated February 7, 2012. Copyright © 2012 The Digerati Life. All Rights Reserved.

{ 37 comments… read them below or add one }

Silicon Valley Blogger August 23, 2009 at 6:09 pm

Thanks to the past financial crisis, the latest credit card usage statistics show that the changes underfoot in the credit industry has put a slight damper on how Americans have been using their cards. The average household credit card debt (for consumers who may or may not continue to carry credit cards) slipped a bit over the last year (2009) — from over $8,300 to around $7,800, while households that do own at least one card have an average debt of almost $10,500. Perhaps it’s a silver lining of the economic downturn?

More interesting statistics bandied around include the fact that 75% of families carry at least one card, which means that 25% don’t own any cards. Also, between 30% to 50% of all card holders actually pay off their debt in full each month (stats vary) so if you buy these numbers, then we may not appear as debt happy as you may think since this would mean that between 55% and 75% of Americans don’t have revolving credit card debt.

Then again, I believe that this is simply a symptom of a bad economy. This kind of trend normally doesn’t hold during improved (or especially hot!) economic periods. August 28, 2009 at 1:03 pm

It’s interesting that credit card debt in 2009 has been slipping. And considered that we are in a recession and more people are jobless, it’s even more encouraging.

I wonder if it has to do with the fact that people are realizing the problems of excess spending. The recession led to a generation of people that was more careful with money. Hopefully the effects of the current recession on people’s spending habits will be somewhat long term as well.

Massachusetts Blogger September 1, 2009 at 12:19 pm

There is a new phenomenon happening where people are paying credit card debt before they pay mortgage debt – perhaps because they are unemployed or underemployed and are using those cards for their very survival. Wouldn’t it be patriotic if we all stopped paying our credit cards and squatted in our homes. It’s morally outrageous that these banks get huge bailouts from us and have the nerve to stick us with exorbitant interest rates and fees.

Tom September 12, 2009 at 1:06 pm

It is really interesting that credit card debt has been slipping. No surprise since it is recession time and many people are jobless. I think if people understand the problem of excess spending that has led to the recession, then people will become more careful with their money, which should affect their spending habits.

John DeFlumeri Jr October 4, 2009 at 12:54 pm

Nevertheless, you’ve got to be real careful when you do a balance transfer!

Proxy October 5, 2009 at 2:39 am

I disagree, a balance transfer can be a complete life saver but yes you do have to be careful and definitely keep on top with what you are doing otherwise you can end up much worse off.

Financial Samurai October 5, 2009 at 11:05 am

Honestly, I just ask to reduce rates. I’ve reduced rates by 5% or more on a couple cards in the past. It’s that easy.

NIC October 6, 2009 at 12:19 pm

I’m not a big fan of balance transfers. I think Financial Samurai has it right. Why not just ask? If you’re looking to get out of debt without turning to a financial source, do it DIY and just ask. What can it hurt? And you might end up getting out of it faster than you thought you could!

Doug October 8, 2009 at 12:36 pm

Thanks for the info.

I tried the “hardship” suggestion and it worked.

Ilene December 27, 2009 at 11:08 pm

It will be interesting to see if consumers turn more to credit card debt for expenses as a result of home equity loans being less available from banks in the current state of the market.

I am confused by your earlier comment:
“The average household credit card debt has been slipping gradually over the last year — from over $8,300 to around $7,800 now (while households that own at least one card have an average debt of almost $10,500).”

What’s the difference between your $7,800 statistic and the $10,500 statistic? Both appear to refer to average household credit card debt of households who own credit cards. Thanks in advance.

Silicon Valley Blogger December 27, 2009 at 11:26 pm

Thanks for the question. Please permit me to clarify: the average household credit card debt (in 2009) that’s quoted as $8,300 – $7,800 refers to the debt of all households that may or may not still carry credit cards. Some households may have done away with using their cards but still have a credit card balance. OTOH, households that still carry and use at least one credit card have an average card debt of almost $10,500. Hope this clears it up!

DinDin71 January 14, 2010 at 4:09 pm

I currently have 9 credit cards and tons of medical bills:( I did balance transfer a few years ago and I wasn’t careful and racked up more debt. This is a HARD lesson to learn. You got to be really careful!

So, I’m currently going on some kind of hardship program with 3 of my creditors today (Bank of America, AMEX, and Citi Visa) they raised my APR in the 20’s% and lowered my credit limit to a point I’ll max out! I just called and they are setting me up with their hardship program. Two other ones told me I can’t because I’m in good standings on paying my bills on time and want me to “skip” my next payment and call back but that will hurt my FICO score. I can pay off my 4 remaining ones (little payments that I can pay off in the next few months).

At the same time, I’m working with a Debt Management program called Money Management International ( This was referred by one of my creditors that they “work with”. They also take medical loans too, which I have. 🙂 There’s a $35 monthly Admin fee but I’m going to try to get that lowered or hopefully waived because of my financial struggles. I owe people money (personal loans).

DinDin71 January 14, 2010 at 4:38 pm

Ok status update. Spoke with one of my creditors and they told me that typically I can only be on one program (Hardship Internally) or the other (Debt Management Program outsource). I can’t do one then the other because they will deny me either way.

He suggested that the DMP will get me a better rate and payment because I’m combining my creditors together into one payment plan. If you know that you can’t pay off all your cards then go on a DMP. My friend suggested this company that she used as well: ClearPoint Credit Counseling Solutions.

Remember there’s always a way, God Bless!

rawwww January 25, 2010 at 2:48 pm

Life can be tough at times, i only have one credit card with a $2,000 balance but am taking forever to pay it off.

Linda January 31, 2011 at 2:13 pm

That was so easy! I just got off the phone with a credit card company and they lowered my interest rate. Thanks for the tip!!!!

Jeremy Streich April 5, 2011 at 10:19 pm


You miss the most obvious way to control Credit Card interest rate, and that is to NOT have a card.

krantcents April 5, 2011 at 10:19 pm

I disagree with Jeremy, the best solution to higher interest rates as a consumer is only put the purchases on the credit card that you can pay off each month. When you are overweight, you don’t give up food. Taking responsibility for your actions is the adult thing to do.

Silicon Valley Blogger April 5, 2011 at 10:20 pm

My take on cards is that they are a tool you can use to make life easier (or harder) for yourself. Just like with anything, it can be abused, so if you go down that path, there are consequences. At the same time, it provides those who are responsible cardholders great benefits. So when you ask me about card ownership, there is no one hard and fast rule about it — it really totally depends on the person and their views of credit and spending. I personally like cards and I make sure I don’t maintain a balance so I never have to worry about interest rates at all.

andrew April 6, 2011 at 10:21 pm

I agree with not having a credit card, but sometimes, not having one can be like a handicap. 🙂

Jeremy Streich April 6, 2011 at 10:21 pm

I know my stance seems extreme to some, but it really is sensible. Just to let you know where I’m coming from, I’m a Christian. Every time Debt is mentioned in the Bible, it is a bad thing. We get pearls of wisdom like: “The rich rule over the poor, and the borrower is slave to the lender” and “How can you serve two masters?” If God think it is foolish, I would be do well to stay away from it.

SVB, krantcents,

Eating is necessary, credit is not; your analogy fails. Credit is like alcohol, in a lot of ways really. You get a buzz when have a few drinks/buy a few things you want, but the buzz is short lived. Often people who push the limits end up regretting the choices they’ve made in the morning. Some are able to exercise restraint and some are not. People become addicted and begin to believe that they need it. Unfortuantly, there are too many debt addicts. The effects are staggering. Average credit card debt per household with credit card debt is $14,750. Average APR on new credit card offer is 14.73 percent. The percentage of workers who said they have less than $10,000 in savings grew to 43% in 2010, from 39% in 2009. And the social effects are more drastic, the number one reason for suicide among males is money issues. The majority of those are on Sunday nights, presumably because they can’t face another week of the grind without actually getting anywhere. 90% of divorces are over money fights and money problems.

I wish it were just our personal finance where America has gone astray, but the national debt is now $13 Trillion dollars. That’s an unfathomable number to me. $1 Trillion, is enough money to wrap around the earth at the equator almost three time. $1 Trillion would pay the mortgage payments on all US mortgages for 14 months, or all the rent in the US for 3 years.

There is only one surefire way to increase your net worth, spend less than you make. If you are borrowing money for McDonald’s, then you are financing a cheese burger for the length of time the card is not paid off. Taking responsibility for actions is an adult thing to do, so is having a plan and following it. The fact of the matter is that most debt is taken on because of lack of planning. Moreover, if you have an addiction (like most of this country seems to with debt), then removing temptation is one of the first steps to get over it. You don’t give a credit card to someone who has debt issues, just like you don’t give a

Consider, you put money in a saving account earning 2% (if your lucky), you get rewards card that has 2% cash back on purchases. So, they are charging you 14% interest to borrow money they are paying you 4% on. Sure, you can avoid the interest payments by paying it all back the same month, but the stats above prove most people don’t do that. Moreover, many people who plan to do that end up getting in trouble, forgetting a payment or getting charged some kind other service or annual fee at some point.

If you never carry a balance, and there are such great rewards debit cards, why bother with a credit card and open yourself to the risk? Is it worth supporting these companies that cause so many so much pain (not that I’m removing responsibility for bad financial choices from the people who make them, but you have admit that credit card companies love the people who get themselves in trouble)? My answer is no. You are free to disagree, but I really don’t understand this idea that these things are “tools”, but then I don’t understand the appeal of alcohol either.

Amy Saves April 6, 2011 at 10:23 pm

One thing about the credit cards that offer rewards or points. Some of them are now charging an annual fee. Do some research before applying. Personally, I think it defeats the purpose of the rewards since you have to PAY a fee in order to qualify.

catherine turley April 6, 2011 at 10:23 pm

i always pay in full every month but had a check held by my bank, making me $6 short on my credit card bill. rather than pay the $6 from another account, i asked what interest i would pay on $6 for a two day period. boy, did i get a rude awakening. they would have charged me interest on the balance that i hadn’t even received a bill for yet?! i scrambled to access one of my less active accounts and paid that $6 pronto. I’m seriously considering getting rid of my chase disney visa because they clearly don’t value their highly responsible customers.

Sharon Warden April 6, 2011 at 10:24 pm

Using a credit card to best advantage is to have about 3 rewards cards. Using them to put on bills, and current expenses you would cash for, rotate them, depending on what they are currently paying 5% on! Like, I put up my Chase for the next couple of months, using my World Points which offers 5% on practically everything until the end of June! Then, Discover takes Gas and Auto back up in July. You just have to juggle, watch your expenses, keep track of your spending every day and pay your cards in full every month. It does take some conservative, pull in the belt spending, but you would have to anyway, if you had to use nothing but cash. Now, some places will give you a discount if you use cash, so take advantage of it. Use whatever is to your advantage, do not overspend. You can be completely on a “cash basis” and use a credit card for every purchase!

Sooner or later this heyday of rewards is gonna end, everybody will be charging annual fees and then, we’ll have to figure out something else. Get the deals where you can; be conservative in your spending. If you don’t need something, don’t get it, even tho it is a “good deal”. Use coupons, but not for anything you wouldn’t buy anyway, unless you plan to donate to charity and then using coupons and getting freebies is a good way to double your charity money! Besides, for us people that get a kick out of “deals” and have to spend every dang time we go out, getting an item for $1 when it’s normally $2 is sort of a score. Buy a CVS green tag for 99 cents. Every time you go in the store, and take a bag to use, you get .25 towards an ECB buck, which can be used to diminish your milk bill! In this day and age you have to be a Shylock! And it sort of take up your time, and it’s kinda fun!

Mihai Rosu April 7, 2011 at 10:25 pm

I use a credit card because it makes it much easier to pay your bills or to buy something from the web. More and more people ask every day for a credit card.

Jeremy Streich April 7, 2011 at 10:27 pm


Why would they. They make no money off the people who pay on time every month. It is in their best interest for you to mess up, miss a payment and incur interest charges and other fees and penalties.

You can do that same rotating thing with rewards debit cards. Why don’t these ever get the same press? Still see no reason to use credit cards.

Studies indicate that using cash actually registers a pain sensation in the brain, the effect is less severe for debit card purchases and almost non-exsistent for credit card purchases. Moreover, studies also show that the average consumer buys more using a card (even if they are paying it off each month). One study puts the difference at 47% more. I know, your going to say “I don’t, I’m the exception” and you very well may be, but how do you know. I wonder what would happen if you used cash for a month, track all spending and compare that to using your card and paying it off. Let’s see if that is really true. I think you’d be surprised. If I had a credit card, I’d might have to try this for a blog post.

As far as rewards go, you’re actually paying for them. Visa, Master, et al. charge a percentage to the merchant on every purchase, but the contracts don’t allow them to “pass that fee onto their customers.” Meaning, they can’t charge that percentage as a “credit fee” to the card users. The result is that to cover these fees, merchants raise prices on their products for everyone. The same fees are charged to the merchant on debit cards used like credit cards (i.e. use a debit card, and when the store clerk says “debit or credit” you say “as credit” and it’s still just drawn from your bank account as debit), which begs the question why aren’t there more rewards debit cards then there are?

“Besides, for us people that get a kick out of “deals” and have to spend every dang time we go out, getting an item for $1 when it’s normally $2 is sort of a score.”

I hope you’re not falling into the sale trap; buying things that are “deals,” that you wouldn’t ordinarily buy. This happens all the time, and the people who do it, like paying more because they are using a credit card, think they are exception. I know me and my wife are often guilty of it. Why did we buy this? “I know we’ll use it, but we don’t normally buy it.” Brings the answer “It was on sale” or “I had a coupon.”

Justin April 7, 2011 at 10:27 pm

It’s tough to get by without credit cards these days- especially when you’re ordering a lot of stuff online.

I love them, but hate them at at the same time. I’ve learned that if I use cash for my day-to-day purchases, I’m much less likely to spend more than my budget allows.

marazm April 8, 2011 at 10:29 pm

Gas and Auto back up in July. You just have to juggle, watch your expenses, keep track of your spending every day and pay your cards in full every month. Often people who push the limits end up regretting the choices they’ve made in the morning.

Cin September 9, 2011 at 2:32 pm

I am 64 on disability. Is it better to consolidate credit card debt with a small loan? I pay my bills on time but the interest is leaving me with little funds to pay for food n gas. I owe $7800 and could pay $200 to $225 a month which pay off low interest loan in 4 yrs. I have been reduced to living with my Mother. I am looking for a job I am capable of doing but my age and cane I use puts people off.

Any suggestions?

Silicon Valley Blogger September 10, 2011 at 11:55 am

If you need additional income, perhaps doing a home based online job or business may work for you. We discuss this quite a bit in our Online Business section. I also mentioned above that if you have good credit, you’ve got leeway to negotiate. Start by finding out if you can request for lower rates with your existing lender. If that doesn’t work, then you can think about potentially consolidating your debt or transferring it over to another personal loan with lower rates. Don’t do this unless you know for sure that you will come out ahead. I discuss personal loan ideas here.

Adam February 3, 2012 at 11:17 am

More people should pay attention to the point that if you’ve got an existing card balance at a high rate, then see if it makes sense to move it to a lower interest card. Consolidating your debt into a balance transfer card account could work if you’ve got the discipline to pay off your balance speedily during the short window where the rate is 0%. If you’re the type who forgets about these apr deadlines, then you are not a good candidate for a 0 APR card. My ex got slammed when she forgot about a rate adjustment.

There’s also the catch that a bt card would have a balance transfer fee which commonly runs 3% to 5% of your balance when you do the transfer. Be aware of the caveats.

Jeff Crews February 7, 2012 at 10:02 pm

I make sure every payment is on time. Not only do I have the date memorized, but I also have a Google Calendar reminder setup.

Silicon Valley Blogger February 7, 2012 at 10:09 pm

Thanks Jeff.

Some people I know automate their credit card payments but I prefer to study a bill before paying just in case there are any errors or any questionable / potentially fraudulent charges I would care to dispute. But it’s annoying when we occasionally miss the card payment deadline because of a silly reason — so a calendar or a scheduled alert is always a great idea.

Lee February 8, 2012 at 9:11 am

Don’t default or miss payments and you must have discipline to persevere and enrich your existence with the possibilities of being free of debt and improve your style of living.

Susan February 10, 2012 at 1:46 am

Credit card debt is up again. The report for last December 2011 shows that revolving debt is up by 4%. This could mean a few things, according to analysts. One interpretation is that consumer confidence is improving. But the more ominous analysis is that people are banking on their cards to help them get by. Maybe it’s a bit of both?

Thomas Schwartz May 18, 2012 at 9:00 pm

Cc companies will always give a HS program. Some do not, such as Cap1, Wells Fargo, and Barclays/Juniper.

I am a negotiator by profession, and know everything about credit cards. Need info? Please email me. I’ve noticed information on this site isn’t really useful in terms of you being successful on your own after leaving this site. Also, information on this site and pretty much anywhere online is very conservative. If anyone needs more up front answers or better direct information, please email me. I am more than willing to help as I hate CC companies because they take advantage as much as they can and they will always twist things their way to make a point re why they can’t lower your rate.

Savers Unite May 19, 2012 at 12:15 am

I’d like to hear more about your agenda. What kind of “negotiator” are you…. really? Do you pitch a paid service or do upsells? Thanks.

Stacey May 22, 2012 at 9:22 am

I agree about negotiating your payments to pay off big debt. Call the credit card company and face the music. That’s what I did, and the customer service representative was more pleasant and professional than I expected.

The card company won’t bite! For ex, I explained that we could not afford to pay off $1,500 at once. She offered to lower the amount due and let us pay it off in three monthly payments of about $350 to settle our debt. This was something we could handle so she offered to mail a confirmation of our conversation.

In just three months, we will have this $1,500 credit card balance off our backs. If I had not called to make payment arrangements, it could wind up as a judgment. This is what happened to the credit card we foolishly used to pay our mortgage payments. If it’s at all possible for you to pay down your debt — do it. If not, call your lender. Don’t hide, reject or abandon it as it won’t disappear on its own.

Leave a Comment