Credit card interest rates are not going down. The interest rate on the average credit card account has gone up from 11.82% in 2014 to 15.1% in 2019 – right around a 20-year high. And the average APR among new credit card offers is now above 19%, having climbed steadily in recent years.
Credit card rates are still going up even though the Federal Reserve is now cutting its target interest rate. That’s because credit card interest rates are determined by a market rate, plus a margin that’s set by card issuers. And those margins are going up for new offers.
The August 2019 average margin was 11.72%, a percentage point higher than 2017’s 10.6% margin, and also the highest margin on record. Credit card companies don’t want their rates to fall just because the Fed decides to discount its target. Plus, high credit card rates help support all the extra rewards and perks offered by credit card companies these days.
If you don’t want to deal with rising interest rates from credit card companies, you have options. For instance, you can avoid interest charges completely by paying your credit card balance in full every month. If you already have a balance that you can’t afford to pay off right away, consider looking for a 0% APR balance transfer credit card. It could give you a break on paying interest and help you pay down your debt faster.
The credit card companies that are most likely to lower your credit card’s interest rate if you ask include Capital One, Discover, American Express, Bank of America, and Barclays, according to reviews online. Chase sometimes sends out promotional low-interest offers to existing cardmembers, but they are reportedly less likely to lower your existing interest rate in response to a phone call. But if you’re trying to get a better APR on your credit card, don’t take this list to be exhaustive.… read full answer
Theoretically, you can call any credit card company to ask for a lower interest rate. The worst that could happen is they’ll say no. Every card issuer goes by its own rubric for rate decrease requests from cardholders. Your credit history is a factor in many cases, as is your history with the specific card’s issuer. Some card issuers reportedly offer deals to people who pay in full every month. Others may periodically dole out low-APR promotions to existing accounts based on certain criteria, but they won’t lower your APR unless you have one of these offers on your account.
It’s good to go into a phone call with your credit card issuer prepared. Know your current APR and how low you’d like it to go before you call customer service. If you’re currently experiencing financial hardship, consider explaining it to the representative. Cite your good payment history (if applicable) and how long you’ve held that particular credit card, if you think it will help your case. And consider whether or not you’re willing to cancel your credit card and take your business elsewhere if they don’t give you an offer. Sometimes, threatening to close your account will spin the results in your favor. The longer you’ve had the card, the better your odds.
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