Looking for low-interest credit cards? A credit card that has a high interest rate can quickly lead to higher debt if you’re not careful. But, with a few savvy tips, you can lower your interest rate or transfer to a card with lower interest.
Here’s how to get the best interest rate for your credit card.
Open a New Credit Card with a Low-Interest Rate or Open a Balance Transfer Credit Card
If an older credit card has a high interest rate, open a card with a lower interest rate. Then, stop using the old card. If your old card has a long credit history that’s in good standing, keeping it open might be a good idea. If the bank is charging a high annual fee, then consider closing it. Or, you can open a balance transfer card with a lower interest rate and transfer your old balance.
Benefits with opening a new credit card:
- The bank may have a low interest rate offer for new cardholders.
- The bank may waive the annual fee for the first year.
- The bank may offer special card back rewards for new cardholders.
Tip: Read the terms and conditions carefully. Confirm the low interest rate offer won’t switch to a higher interest rate after a few months. If it’s a zero percent interest rate offer, check the terms. Some cards advertise zero percent interest but the fine print states its for purchases only.
Look for a card like the Scotia Momentum Mastercard. With no annual fee, the interest rate is 7.99 percent for the first six months. Or, try the National Bank Syncro Mastercard. The annual fee is $35 and the interest rate is 8.90 percent.
Call Your Bank and Ask for a Lower Interest Rate
You can call your bank and request a lower interest rate if your credit card is in good standing. You can also call them if you’re experiencing financial difficulties.
To help negotiate a cheaper rate:
- If it’s due to hardship, ask for a lower interest rate so you don’t default on payments.
- If you’re in good standing, request a lower interest rate. One approach is to state that you saw the bank’s current offers on their site. Or, that you saw lower rates on RateSupermarket.ca. Compare low interest rate credit cards now. This can give you leverage when requesting a lower interest rate.
- Another approach is to mention another offer from a similar lender. Ask your current bank if they can match what another lender has to offer.
Pay Your Balance to Raise Your Credit Score
Banks charge high interest to protect themselves financially if a borrower defaults on a credit card account. But, by showing your account is in good standing, you have more leverage for low credit card offers.
Pay your balance in full and don’t use the card. This will raise your credit score and make you eligible for low interest rate credit cards.
Tip: Pay your balance off during the grace period. The interest won’t capitalize into your current balance.
Don’t Accept a Higher Interest Rate Offer
A lot of consumers aren’t aware of this, but you can refuse a high interest rate offer. To do this, when your bank states the interest rate is increasing, call and tell them you don’t accept their offer.
They may do the following:
- They can agree not to raise it.
- They may negotiate a rate you can afford.
- They may recommend closing your account and setting up a repayment plan.
Shop Around for the Best Low Interest Rate Credit Card
Switching to a low interest credit card is possible. Shop around for a new card with lower interest, negotiate terms with your bank or refuse a high credit card offer. You can also pay your balance off each month or set up a balance transfer to a card with a lower interest rate. For help with credit cards or if you have questions, contact RateSupermarket.ca.
Let RateSupermarket.ca help you compare the best low interest rate credit cards Canada has to offer. With competitive rates and high cash back rewards, say goodbye high interest! Compare low interest rate credit cards today!