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How many times have you opened a credit card account bill only to see the annual percentage rate and just about cry. Unfortunately, charge card account companies have been raising APRs lately and if you have a charge card, this is most likely not new news to you. Although charge card companies are in the business to make money, there are ways to reduce these annual percentage rates to a more manageable rate. But before we get into that, I would like to explain to you a bit about why your interest rate was raised in the first place.

credit card companies have many reasons to raise annual percentage rates. Maybe you made a late payment. Maybe you spent more than the credit limit allowed. These two reasons are called defaults and in most cases will raise your annual percentage rate to 29.99 and above. However, many consumers have noticed their interest rate being raised even though they are no where near their credit limit and they pay their bills on time every time. The reason for this is a bit more detailed than you may think. In 2009, a new legislation was passed that forced banks to be a bit easier to deal with when it comes to due dates and other aspects that may cause them to raise your interest rate. Due to these new charge card rules, it is much harder for banks to just raise your rate without your knowledge. Although, this sounds like a cruel act, raising annual percentage rates on a drop of a dime was a way that banks were able to price for risk and maintain the risk verse reward aspect easily when loaning money through credit cards. With the new legislation, it is harder for charge card companies to price with regards to risk. With that said, unfortunately credit card companies decided to raise the majority of interest rates not based on your history but based on statistics of your future, the type of credit card account product you have, and many other factors. Now that you know why your interest rate has been increased, it is time to learn how to reduce it!

Step 1: Call your charge card account company. Although credit card account companies do indeed seem like an all mighty all powerful corporation that doesn’t care about their clients, with most banks, this is not the case. If you have done everything right as far as paying on time and not spending more than your credit limit allows, some charge card companies will be willing to lower your interest rate for you if you simply ask nicely. Ask the credit card account company why your annual percentage rate was increased and what you can do to reduce it and in most cases, this will become a very helpful call.

Step 2: Look into balance transfer offers. If your credit card account company is not willing to work with you on reducing your rate, other credit card companies will be willing. The charge card account industry is like any other, there are plenty of competitors ready to take your business from another company. Many balance transfer credit cards will come with a 0% introductory rate for a short period of time. Don’t let this suck you in! Keep an eye on the standard APR for the credit card account and make sure that once the introductory period is over, you won’t be paying more than your already are. Also, when searching for the best charge card for balance transfers, make sure to use a reputable charge card comparison website like www.JemCreditCards.com or www.1-2-3-CreditCards.com. I would advise starting with Discover cards or Chase cards whereas they tend to have the best offers.

Step 3: Talk to your bank about hardship programs. If your bank wasn’t willing to negotiate a lower APR and you did not qualify for a balance transfer credit card account, this is for a reason. You have probably fell on some hard times and paying your charge card bills has become a last priority. This is OK. charge card account companies understand that when you applied for the card you made a good living but with the economy the way it is, it has become tough. Call your charge card company and let them know that you are having a financial hardship. Explain your financial situation to the representative in detail and in most cases, they will stop the card from being able to be used and place you on a payment plan that you can afford.

Final Note:

This article is based on the personal opinion of the writer. It is written for your reading pleasure and not to be taken as legal advise. I am a normal guy that likes to watch sports and have a beer with the guys. I am by no means a lawyer so please do not take this article as legal documentation.

Tags: charge card, charge cards, credit card, credit card debt, credit cards