Ways to get the best credit card interest rates

Credit card interest rates can make or break those who use them. They tend to be some of the highest rates consumers ever pay, and the amount one spends on these rates compounded over time can be very high. This makes credit card rates a critical factor when apply for and using credit cards. Fortunately, there are steps cardholders can take to get the best rates.

Credit card criteria

Many consumers receive numerous credit card offers promising good rates, or at least good rates as far as credit cards go. Deciding on what offer to go with can be a difficult task, and one has to think of the criterion that is best for them. While factors such as annual fees are most important for some, the interest rate of the credit card should always be the paramount concern for those who may not be able to pay the balance in full every time.

Understanding interest rates

Basically, the whole system of credit cards and interest rates can be traced back to the way merchants have long let favored customers to buy on credit to guarantee business and build relationships. With credit cards, a bank has stepped in as a kind of an intermediary.

To make money, credit card companies utilize revolving balances, which are designed primarily to encourage people to keep at least some kind of balance on their cards so that they must pay interest. This method used to calculate this interest is usually the Average Daily Balance (daily balances/number of days*interest rate).

More details can be found in how credit cards work. Basically, apart from any fees, the number to look for is the annual percentage rate or APR. This will be based on factors to include interest rates in general, the card issuer’s policies and the credit worthiness of the person with the card. Obviously, people have the most control over their credit ratings and need to protect them if they want lower interest rates.

Be wary of the fine print

The rates on many credit card offers often appear too good to be true and sometimes are. Credit card companies are in the business to make money, so keep in mind they certainly have thought of an angle to make money with the service they are providing. A case in point is 0% APR credit cards. The catch may be a much higher annual fee. Or, as with a credit card balance transfer, the rate may increase significantly after a period of time. These offers may still be the way to go in the end, but they only should be considered when all factors are taken into account.

Getting the lowest credit card rate

There are a number of things people can do to get the best credit card interest rates.

One tactic many people overlook is simply to call up their company and ask to speak to a representative about getting a better rate. While the credit card company is not likely to offer this right off the bat, persistence will often pay off. Before calling, know the following:

  • Your credit score
  • What those with the same score are generally paying with other credit cards. Credit card comparison sites to include bankrate are good sources of this info.
  • General knowledge of the account, including how long you have had the card, the amount that is charged on it in a typical month and what you are paying in comparison to others with similar cards and credit ratings.

Point out to the representative the amount of business the account in question has generated, and the other credit card offers that are out there. The credit card holder is, in fact, the customer. If the company refuses to offer any kind of a reduction, there is no need to show any loyalty to it. Do not be shy about dropping a credit card for another reputable card if it offers a better rate.

Stay on top

It is also a good idea to login to the company website frequently to check balances and for deals. Credit card companies often have unannounced deals that apply to current customers too. Stay on top of what the company is offering and grab any good deals out there. One should never stop looking for deals with their current company or any other one that comes along. At the same time, do not become too fixated on the rate since this is not always the best overall offer, as is explained in low interest credit cards.

Those with good credit ratings will get the most credit card offers and be able to pick and choose the best credit card. This should be further motivation to keep that credit rating as clean as possible.

Eliminate all interest

The best credit card rates always go to those who simply pay off their cards in full every month. Therefore, for a truly zero APR, simple make sure there are enough funds to cover any credit card purchases every month! When this is done, interest rates and most fees can effectively be ignored. It is even possible to make credit cards a source of income with cash back, frequent flier and other awards cards. Pay off credit card debt has some tips on how to do this.

To learn more about all types of credit cards and how to find the best one for your situation, see the following guide to credit cards.

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