How to Lower Your Credit Card APR

Friday, January 24th, 2020
Updated: January 24th, 2020
The content is accurate at the time of publication and is subject to change.

What Is APR?

APR is an annual percentage rate or an interest rate you need to pay on your credit card for certain operations. There are some types of APR: a purchase APR, a cash advance APR and a balance transfer APR. They can either be different or the same.

Issuers often offer an introductory period, typically 6-15 months, when you are charged a lower or even 0% APR. This is your chance to save.

What APR is Too High?

APRs for different types of credit cards may be absolutely different. But something you should keep in mind is that the lower your APR, the better. To make sure your APR is really high, you need to make a comparative analysis.

First, you can explore official surveys on credit card average rates across the country. Such reports are regularly posted by the U.S. Federal Reserve and by some other sources. Thus, the CreditCards.com’s rate report published on May 22, 2019 states the 17.73% national average APR.

Also, you can use online card comparison tools to see how matters stand with other credit cards.

How to Lower APR?

After you’ve got added evidence that your APR is not competitive, it’s time to start acting. We prepared some tips that are to help reduce your APR:

  • Call the Issuer. According to a CompareCards survey, more than 80% credit card holders who ask issuers to lower their APR make a go of it. However, only 20% of cardholders in the U.S. ask. The reason is that they simply don’t know there is such a possibility or are skeptical about it. But if your account is in good standing and you own it for a long time, why not to try?
  • Apply for a New Low APR Credit Card. If the issuer refuses to bring down your APR, consider a new credit card. Probably, you will even benefit from this, as among other things a new card may have more attractive perks. Just have a look around to see what great deals are available. There are a lot of 0% and low interest credit cards. As a rule, they come either with a long 0% period or with a low ongoing APR. Try to find a middle ground.
  • NB: We would recommend you think well before canceling your old credit card. It may affect badly your credit score, especially if you own that card for a long time.

  • Say Yes to a Balance Transfer. Check whether the credit card you’ve chosen enables balance transfers. Most of balance transfer credit cards can also have very low or 0% intro APR for both balance transfers and purchases. However, some of them charge a balance transfer fee which is usually about 5%. Therefore, count if it is more advantageous for you.
  • Pay Your Balance in Full. There is one way to totally avoid a purchase APR for all your life. Don’t carry a balance. Banks won’t charge you any interest on purchases if you pay your entire balance by the due date each month. Yes, this way may be not so easy, but it is definitely worth it.

Following these guidelines and making some efforts, you’ll tend to reduce your credit card APR.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

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