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The best way to avoid getting hit with charges is to pay your balance in full every month. But if you end up carrying debt, there are a few ways you should consider lowering your APR.
One way to bring down the interest rate on your credit balance is to transfer it to a card with an . If your credit is good enough to qualify for one of these offers, you could end up dodging finance charges for a long time.
But keep in mind that there are a few things to watch out for with balance transfers. The first is fees; most credit cards charge a 3% fee for transferring a balance. This could significantly cut into the overall amount you’re saving.
TIP: Check out our tool to figure out the .
Be mindful of making your payments on time. Missing even one could cause your introductory deal to be canceled, and interest may start accruing right away. Also, you should make your best effort to pay off your balance before the 0% period ends. Again, interest will eventually start accumulating if you carry a balance beyond that point.
They don't get as much attention as cards with generous rewards or those with long 0% periods, but credit cards with a low ongoing interest rate are a good option for those who consistently carry balances. See our roundup of the , or check with a local bank or credit union.
Calling your credit card issuer to politely discuss your APR is another alternative if you can’t qualify for a 0% credit card. In some cases, they might agree to lower your interest rate in order to keep your business. Or, they might be willing to move you to a different product with a lower APR.
Your issuer may or may not be able to help you find a lower interest rate, but it certainly never hurts to ask.
You credit score might be the biggest obstacle to getting a lower APR on a credit card. Usually, lenders consider your when deciding the terms of credit products — including your interest rate.
So improving your credit score will go a long way toward helping you qualify for a lower APR on credit cards. It will put you in a better position to get approved for a card that’s offering a 0% deal, negotiate a lower interest rate on a card you already have, or get a lower APR on a new card you're applying for.
Here are the Nerds’ top tips for getting your credit into good shape: