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With Credit Card Rates Rising Fast, Here’s How to Ask for a Better Deal
Swiping your credit card has now become more expensive than ever, and it’s because credit card interest rates are rising crazy fast. That’s why we think you should call your credit card company and ask for a better rate — pronto.
We’re serious about this! But first, let us explain:
Your credit card’s interest rate, also known as an APR, has probably gone up just like all the other credit cards have. (Most credit cards have a variable rate.) Have you checked lately? If you have an unpaid balance, your card is probably charging you a surprising amount of interest on it right now.
Suddenly our credit cards are bleeding us dry. Here’s how fast rates are rising.
As recently as 2017, the average APR on a credit card was lower than 13%, according to the Federal Reserve. Then, from 2018 to the start of 2022, it usually hovered around 14.5%. But over the past year it started climbing with breakneck speed, and now the average APR has climbed above 20.6% — the highest it’s ever been.
You don’t have to sit still for this. Just take a little initiative and call your credit card provider.
Don’t be chicken. The phone number for customer service is right there on the back of your credit card.
You have nothing to lose!
Look at your latest credit card statement. Check your credit card’s interest rate. If you have more than one credit card, check all your cards.
If you’re unhappy with your APR, ask for it to be lowered. Do this for each of your cards.
A few things to keep in mind:
The worst thing they can do is say “no.” Big deal.
It’s worth trying this because credit card debt is the most expensive kind of debt you can have. Credit cards charge you higher interest than mortgages, car loans, personal loans or lines of credit.
Most credit cards have a variable interest rate that follows what the Federal Reserve does, and the Fed keeps raising interest rates in an effort to fight runaway inflation. That’s why you can expect your credit card APR to go up, not down — at least for now.
If possible, the best thing you can do for yourself is to avoid leaving an unpaid balance on your credit card, month after month. Those interest payments add up.
We have a whole guide for how to pay off credit card debt.
Here are three strategies to consider.
Remember, don’t get stuck in the credit card trap. Nowadays, swiping that plastic is pricier than ever.
Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder.
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