As you check through your credit card statement (and if you don’t you should do!) you will probably notice there are a number of different interest rates mentioned. The reason for this is that credit cards tend to have more than one rate of interest being charged to the account.

You will have your:

  • Balance transfer interest rate
  • Purchase interest rate
  • Cash advance rate

Your balance transfer interest rate will normally be the lower promotional rate you will have been offered when you opened your account, and will only be valid for a period of time. Your purchase interest rate will be what is charged on any new purchases you make with the credit card, and finally cash advance rates are what is charged for cash withdrawals, or cash back transactions.

Once you understand these different rates then you will be in a better position to lower interest rates on your credit card balance.

How can I Lower Interest Rates On Your Credit Card Balance?

There are a few ways you can reduce your interest rates, or at least lower the affect that interest charges have on your account. Here are some of them explained.

1. Do a balance transfer – If you have an existing credit card debt but are not on any special low rate period then you should look at doing a credit card balance transfer. A balance transfer let’s you move all your outstanding card balances over to the new credit card, but will charge you little or no interest on your balance for a promotional period of time. This will save a fair bit of money for you, and reduce your overall rate of interest.

2. Do not make new purchases – One of the easiest ways to save money in interest on a credit card is by not spending on it. If you can limit the amount you use your card, or even consider only using it in an emergency then there will be no increase in your overall balance. That means nothing for the lender to charge you interest on.

3. Overpay – Often overlooked but very effective is to pay ore than the monthly minimum payment on your credit card. This saves you money in a couple of ways. The first being that you are paying your total balance off faster, and second by doing so you are reducing the figure your interest will be charged on. That means lower interest rates on your credit card balance.

There are a number of other things you can do to lower your rates and balance. One of the most obvious being to compare all the different card deals available and see if you can get better rates straight off the bat.

Put some of these ideas into effect and you will see your credit card balance shrink faster than you thought possible.