What Is a Credit Card Interest Rate and How to Choose the Best One

26 May

What Is a Credit Card Interest Rate and How to Choose the Best One

Choosing your card by the expenses you have and the interest rate the card offers is the best you can do when looking for an effective-cost credit card. Knowing what kind of interest rate you’re expecting to get is a good starting point.

Statistics show that an average American family has about 50.000$ on its credit card debt. So, the issue of looking for the best ways to pay less and get more in return is always on the agenda. The main problem is that most people are not looking for the ways to find better and lower interest rates. They are not ready to spend a couple of hours or days on finding those interest rate conditions, which will be cost-effective for them particularly. They don’t even want to negotiate a lower interest rate with the bank, they’re already working with. By the way, some people don’t realize they are able to negotiate that lower interest rate. And you?

Okay, let’s figure everything out step-by-step.

Getting the Best Interest Rate

If you are already working with a certain bank and you’re not satisfied with the expenses you have because of the interest rate, call and ask them how much you have paid in interest this year. Analyze the numbers provided.

Don’t throw away all of the debit card offers you usually get in the mail. Instead of this, collect them. Look through the deals, which are out there, compare their individual features side by side, and use them as a leverage in your current bank. Ask if they can provide you with a better interest rate, at least in perspective in the near future. Usually, banks agree to lower the average interest 2-3% points because they don’t want to lose a client. And that means you can save up to 1000$ per year.

Still, a low rate doesn’t always mean a great deal. Why?

The right credit card doesn’t mean it should have the lowest interest rate possible. This only means it should depend on your personal needs and credit card use. There are 2 main types of the credit cards:

  • Low rate cards (has an annual fee and a low-interest rate);
  • And standard cards (no/small annual fee and the interests, which are 6-7% higher).

So, always remember that you can and should negotiate with your creditors to get the benefits from your collaboration with the bank and the lower interest rate in particular. Look for the offer with lower or fixed monthly interest rates, cash back bonuses, the ability for large balance transfers, etc.

We hope you’ve found this information helpful and informative. Go ahead, contact your creditors, and negotiate too. Get a lower interest rate and use the money saved to pay down the balance faster.

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