How to earn lower interest rates on credit cards

Believe it or not, you must earn lower interest rates through responsible financial behavior. To earn lower rates, you first need to know what lower rates you deserve based on your creditworthiness and financial status. To improve your prospects, you might need to make some changes to your financial habits so that you can earn better rates. Finally, you need to know how to follow through so that you can take advantage of those lower rates.

Here are those steps to earning lower rates on credit cards. Of course, if you are having difficulties making your payments, you might need to consider getting extra help, since these instructions are for those with surplus income.

  1. First, you need to determine your credit scores. If your scores are below 650, then you will experience some difficulty in receiving lower interest rates. For scores over 700, you are deserving of low rates, with the best rates available if your scores are 760 or higher.
  2. Second, determine how much surplus income you have each month. Make substantial overpayments on any single credit card where you are currently paying a high rate of interest. Doing so is a demonstration of your financial strength, and repeating this process for at least 3 months proves that you have the financial ability to pay down debt rapidly.
  3. Third, contact your credit card company directly to request the lower rate. Be armed with any preapproved credit card solicitations to cite better offers by their competitors. Tell them that you intend to transfer the balance unless they reward your activities by lowering your interest rate.

If you are successful in getting a rate reduction, you should continue overpaying on that account just as you have done so that you can request another reduction in a few months. You should follow these steps until your rate is reduced to the lowest available rate as published at Bankrate.com. Alternatively, if you have other cards that also carry a balance, then you might next shift your focus toward making overpayments on one of those so that you can then request a lower rate.

Paying down your debt rapidly while meeting all monthly payments on-time will improve your credit scores and allow you to benefit from lower borrowing costs. Not only will you become eligible for lower credit card interest rates, you will also find that other lenders will also consider you for their lowest rates. This could save you thousands of dollars on your next home or vehicle purchase.

Please note that having a financial surplus gives you many options for proving financial strength so that you can earn lower rates. If you are having financial difficulty, then there are other steps that you may need to consider. These can include hardships, debt management programs or more extreme solutions available through legal proceedings. For more information, speak with an Accredited Financial Counselor about your options.

Kenneth Long
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Kenneth Long

President at Debtors Unite
Kenneth Long is President of Debtors Unite, Inc. as well as President and Vice Chairman for Vision Credit Education, Inc. He served as a regional coordinator for the North Carolina Saves campaign. Long co-founded the Wake EITC Coalition along with Family Resource Center of Raleigh.

Long is a graduate of the University of North Carolina at Chapel Hill with a B.A. in Industrial Relations. He subsequently received his Certificate in Nonprofit Management from Duke University. His Certificate in Financial Planning was issued by Florida State University.

Long has achieved the Accredited Credit Counselor and Accredited Financial Counselor certifications through the Association for Financial Counseling, Planning and Education. Long originally achieved the Certified Credit Counselor designation through the National Institute for Financial Education.

In addition to years of nonprofit leadership, Long has been an innovator in the field of volunteer tax return preparation programs. He assists volunteer associations and nonprofit organizations who seek to integrate credit counseling and asset-building programs with free personal income tax preparation. His approach to using free credit reports as both an incentive and a screening tool for placement into asset-building programs has been shared with members of the National Community Tax Coalition, the EITC-Carolinas Initiative of MDC, Inc. and nonprofit groups across the Carolinas.

Long assists members of our armed forces in the Carolinas, Iowa, Rhode Island, Georgia and Germany with financial readiness. Please support our Soldiers, Marines, Airmen and Sailors!

Favorite quote:

"The democracy will cease to exist when you take away from those who are willing to work and give to those who would not."

Thomas Jefferson
Kenneth Long
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