How does the interest on my credit cards get lowered?
Posted by | Posted in Credit Cards | Posted on 17-04-2010-05-2008
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I was just wondering how interest rates get lowered on credit cards? Why do some people have lower interest rates, and some have higher? I understand the whole difference between credit scores and that some people have better credit than others. But I know that every single person with a low interest rate on credit cards didn’t "call and dispute with the card company until they lower the interest rate". So, how do they get it? Is it something the credit card companies monitor regularly and lower according to your credit improvement and such over the time? I’m 24 years old, my credit score is 750+. My cards have been allowed higher credit increases in very short times that I’ve had them, due to zealously paying them above and beyond the expect (and sometimes multiple times a month). None of the cards are charged up 1/3 of their limit..less than that. What things can I do to get lower interest rates? One has 22.24%. Not sure about the other two.
Absolutely nothing bad on my credit…
Actually…while it is a good practice to stay on top of what you charge on credit cards (and to immediately pay off what you owe to avoid interest)…it’s good to carry a balance from time to time. Credit cards are for that; for credit. Meaning you DON’T have the money at the time – Thus, that’s the whole point of credit. You can buy what you need now, and pay it a little later when you have the money. Though of course, you don’t charge up what you know you won’t be able to pay back, either. But good credit isn’t built without carrying a balance at some point. If you cancel out your charge each month by completely paying it off, where’s the ongoing charge for ‘credit’? It shows them you are just playing a game, trying to make your credit better, but not being able to apparently handle needing a higher credit limit (which can and does indeed affect your credit score, that I do know). So…if they see that you "pay it off instantly", what’s the point of them upping your credit line??
I’m in the same situation.
Here is what I found out. Recently I called one of my credit card companies to cancel a card I hadn’t used for 4 years. I was transferred to a "Account Closing Rep" who tried to convince me to stay with the company. My current interest rate was 22% and he offered to lower it to 8% if I stayed. I almost decided to stay with them, but realized that paying in cash is always better than paying with credit.
So maybe you just need to call and ask to cancel your card in order to get the interest rate lowered. Or you can just open a new credit account with another company and transfer your balance.
Maybe I just don’t get it; (tilt) but the way that I understand it is if you always pay your credit card bill on time or (even better early) you WON’T HAVE TO PAY INTEREST. That’s what a GRACE PERIOD IS FOR ! !
So if you always pay your credit card bill on time or MULTIPLE TIMES a month as you put it then the interest rate SHOULD NOT BE A CONCERN