Once you find yourself sinking in credit card debt, it can feel impossible to find financially firmer ground. Maybe you were lured by an attractive 0% introductory APR and didn’t realize your “free period” was over. Or maybe you charged more than you meant to and now you’re struggling to repay your balance.
Whatever the reasons your balance grew, you’ve got two options to stop interest payments from killing your finances: negotiating a lower APR or transferring your balance to a credit card with a lower APR.
Let’s look at how you can put these two practices to work:
Negotiate a Lower Rate
Your first line of defense should be to negotiate a lower rate. This is usually a more desirable alternative than transferring your balance because it’s less work and you’re not having to open a new line of credit.
Use these four tips on how to lower your APR on your credit card:
– Start with Your Oldest Card
You can use your length of service with a company as a bargaining chip. Remind them you’ve been a customer of theirs for X years and you’d like to continue that relationship. Companies are usually willing to help long-time customers when possible if it means keeping their business.
– Call Customer Service and Ask
On the back of your credit card, there should be a customer service number to call with questions about your account. Pick up the phone and speak to someone about reducing your APR. It never hurts to ask, and the answer might just surprise you.
– Be Persistent
If a customer service rep is unable to help you, don’t give up. Be persistent and ask to speak to a manager. Managers may be more empowered to grant requests and can help you achieve the result you need.
– Ask Nicely
It’s easy to get upset if the company doesn’t want to lower your APR, but don’t let your frustrations get the best of you. Companies are more willing to help customers who are polite, especially in the customer service industry where unpleasant calls are usually the norm. Remaining polite and in control can help you to stand out and find a reasonable solution.
Also, let them know you’d like to remain a customer of theirs, but may be unable to if the APR remains outside of your financial comfort zone. If they want to keep your business, they’ll work hard to do so.
What If You Can’t Get a Lower Rate?
If you still can’t get a lower APR after using the above tips, don’t panic. You can transfer your balance to a credit card with a lower APR, as long as you’re prepared for the risks.
Opening a new credit card will leave a mark on your credit history and may slightly drop your score. You’ll also want to make sure you’re not charging more on this credit card and can pay off your balance while you have the introductory rate. Otherwise, you risk incurring more debt that you were trying to get rid of in the first place.
Also, consider any balance transfer fees you may incur. Try to choose a credit card that offers no-cost balance transfers to keep you moving toward a $0 balance.
Don’t Let Large Balances Linger
It’s important that if you do have a credit card balance that you can’t pay off in the near future, you don’t let it linger too long. The interest will only continue to build, making it harder to pay off that debt over time. Even a $20 meal can easily turn into a $40 expense because of a high APR.
Take action sooner so you can keep your finances in good health.
Hope this helps!
Your Partner in Prosperity,