While a credit card is one of the easiest ways to improve your liquidity crunches, it can be one of the most expensive ways of borrowing money. This is because if you carry your debt forward to the next billing cycle, you will be slapped with an Annual Percentage Rate (APR)that may be as high as 25% or 30%.
Even if it’s not as high, it can still be quite challenging to pay the debt off with interest accumulating on it. The lender sets this interest rate when you first apply for your credit card. If your creditworthiness has been low or you have a poor credit history, there’s a good chance you’ll be given a high interest rate.
Fortunately, in most cases, you have the option to renegotiate this rate once some time has passed. However, you can only lower your credit card interest rate if you practice complete financial discipline during your alliance with the lender. Keep reading to learn how you can do this.
1. Maintain Good Payment History
It’s absolutely essential for you to maintain a good payment history with your creditor. If your creditor sees that you don’t pay off your debts and carry them forward every month, there’s a higher chance that they’ll keep you at a high interest rate.
2. Pay More than the Minimum Amount
You can choose to only pay the minimum amount every month, but you should always aim to pay more than that. This will not only improve your creditworthiness and score; it’ll also reduce your outstanding debt levels.
3. Reduce Outstanding Debt
The best way to be in a better position with your lender is to reduce your outstanding debt as much as possible. Ideally, you should try to become debt free before negotiating your rate, but even a significant debt reduction will help.
Once you do all these things, you’ll be in a better position to negotiate with your lender. Even if they don’t reduce your interest rate, you should continue practicing financial discipline and try again after 3-6 months.
If it still doesn’t happen, you can consider applying for a balance transfer credit card to help you lower your interest rates and reduce your overall debt.
Compare the APR of all Credit Cards in Canada on Great Canadian Rebates
Before getting a credit card, you should make sure to compare the APR of all the credit cards and choose one that gives the lowest rate.
Whether you’re looking for a balance transfer card or a low APR credit card, start by reviewing all the major credit cards in Canada using Great Canadian Rebates. Our online platform can help you do a side-by-side comparison of each and help you choose one that lowers your credit card interest rate. If you apply through our platform, you’ll also get generous cash back on the credit cards as soon as your application is approved. Visit our website for more information about us.