Paying your credit card at the end of the month may seem like a hassle but paying it on time can really help you out in the long run! Now, in order to pay your credit card, knowing the current credit card rate is very important! Why?
First, let’s talk about interest rates. What are interest rates? An interest rate is the amount of interest due per period, a percentage, as a proportion of the amount lent, deposited, or borrowed.
But, even a small change in interest rates can have a big impact. It’s important to keep an eye on whether they rise, fall, or stay the same. If you’re the borrower, the interest rate is the amount you are charged for borrowing money – a percentage of the total amount of the loan. You can borrow money to buy something today and pay for it later.
Basically, interest is what you pay for the privilege. It’s the cost you pay to ‘hire’ someone else’s money! Now, is that interest always the same amount? Actually, no. Interest rates can change overnight and if they change drastically, they can either help you by being super-low or can even be super high and give you a headache!
For most of 2020 and 2021, the national average credit card APR has hardly moved, remaining within a rounding distance of 16% for 79 straight weeks. This means if you pay down a $10,000 credit card balance for five years (or 60 months), you would pay $4,590 in interest during that time. Due to said interest not budging in the last year, many consumers are shopping for a brand-new credit card and will be seeing much lower rates than they typically saw prior to the pandemic.
But, did you know that you can also lower your interest rate? How so? Here are 3 ways:
Improve Your Credit Score
One of the easiest ways to give your credit rating a boost is to pay your credit card bill early or on time every month. And if you have a lot of debt in relation to your credit limits, you can also improve your credit score by paying off your debt.
Call Your Card Issuer and Ask
Even before you’ve taken steps to improve your credit score, you can give your credit card issuer a call to request a lower interest rate. You know what they say—it never hurts to ask. If you have kept up with payments and have a solid history of responsible credit use with your credit card issuer, it’s possible they’ll lower your interest rate just to keep your business. The worst they can say is “no.” You can also try calling again once you’ve spent some time building up your credit score.
Apply For A Balance Card
One way to pay less in interest for a limited time is to apply for a balance transfer credit card. What will this do? This will let you secure a 0 percent intro APR on transferred balances for at least 12 to 18 months. Just keep in mind that balance transfer fees are typically required for these offers, so you won’t get access to that 0 percent APR for free.
CCR: Current Credit Card Rate Review
So whether you are paying one or two credit cards, knowing how much interest you are paying is very important! But the most important part of all, paying it before you accumulate unnecessary debt. Need more tips on how to pay back your credit card? Contact Mediator Debt Solutions!