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4 Ways to Get a Low Interest Rate Credit Card

Lance Cothern

A credit card with a low interest rate can offer savings and flexibility. Though credit card annual percentage rates typically range from 17 to 24 percent, it's possible to get a card with a lower interest rate.

Rest assured, the amount of effort is relatively small compared with the benefits of securing a better APR, especially if you carry a balance. You can get a low interest rate offer in these four ways:

-- Improve your credit score.

-- Apply for a low-interest-rate card.

-- Work with your current credit card issuer.

-- Apply for an introductory zero percent APR offer.

[Read: Best Low-Interest Credit Cards.]

Improve Your Credit Score

"There is a direct relationship between the quality of your credit and the amount you're likely to pay for credit," says Mike Sullivan, personal finance consultant with Take Charge America, a nonprofit credit counseling and debt management agency based in Phoenix. If you don't have a good credit score, you can qualify for better interest rates on credit cards by working to strengthen it.

Improving your credit score is usually easier said than done, though. Your credit score shows card issuers and lenders the potential risk you pose to them. While adjusting your habits to build good or excellent credit helps your score increase, this change won't happen overnight. That said, you can work to raise your credit score by:

-- Making on-time payments

-- Keeping debt low compared with available credit

-- Having accounts open for as long as possible

-- Holding a variety of loans on your credit report

-- Avoiding new lines of credit

Another way to boost your credit score is checking your credit report for errors and fixing them. If you find an incorrect negative mark, dispute the item to get it corrected. Doing so may positively affect your score.

Apply for a Low-Interest-Rate Card

Shopping around for interest savings can pay off. Research credit cards, and take note of the lowest interest rates they offer. You probably won't qualify for the lowest advertised rate without excellent credit, but knowing a card's APR range can be helpful.

Keep in mind that a credit card with the lowest interest rates may not have other features, such as rewards or valuable cardholder benefits, so consider what's most important to you when shopping for a card.

If you have a large amount of debt you need to keep on a credit card, prioritizing a low interest rate can save you a lot of money. Compare the offers of not only large national banks but also credit unions and specialty lenders.

[Read: Best No-Annual-Fee Credit Cards.]

Work With Your Current Credit Card Issuer

You might not have to apply for a new card to get a lower interest rate. As you improve your credit score, or if you already have good or excellent credit, ask your credit card companies to lower your rates. "If you're paying a high rate, or even if you're only paying a modest rate, it's probably silly not to ask once in a while," Sullivan says.

Simply call the phone number on the back of your card, and speak to a customer service representative. All you have to do is ask the representative to lower the interest rate on your credit card. The representative might say no, but he or she might say yes -- especially if you've improved your credit rating and consistently paid your bill on time.

If you've managed to secure a superlow interest rate on your credit card, keeping the interest rate you've obtained is important. In particular, make sure you follow the terms and conditions you agreed to when you signed up for your credit card. For example, you'll need to pay your bill on time each month.

Apply for an Introductory Zero Percent APR Offer

Another option if you need a lower interest rate is a card with an introductory zero percent APR on balance transfers or purchases. This type of offer could finance a large upcoming purchase if you know you have the cash flow to pay off the card before the introductory period expires. You could also use an introductory zero percent APR promotion to transfer and pay off higher-interest credit card debt.

But these offers often come with catches: For one, they don't last forever. "You should, as a consumer, take all the steps necessary to ensure you're going to pay off the amount that you have borrowed -- well before the end of the introductory period -- because, if you don't, the APR will likely jump pretty high," says Alison Norris, strategy manager at SoFi, a personal finance company. Many balance transfers require you to pay a fee of about 3 to 5 percent, too.

[Read: Best Credit Cards Without Balance Transfer Fees.]

Remember to Look at the Big Picture

Getting and keeping lower-than-average interest rates on your credit cards is a good option for debts you maintain for a short time. However, the interest usually charged on credit cards can add up fast, especially if you know you'll be carrying the credit card debt for a while.

"If you're not able to pay off the balance quickly or move to a zero percent introductory offer, a personal loan may be the best option to eliminate that debt as soon as possible because personal loans tend to have lower interest rates than credit cards," Norris says.



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