To pay off high-interest credit cards, pause spending on the card and commit to paying more than the minimum each month. At the same time, consider ways to lower your interest rates, or add to your income so you can pay down even more debt each month.
APR's are that high because credit cardholders rarely have to pay the interest. Credit Card companies make money off of interest. Cardholders generally don't care much about APR when applying because they don't intend to ever pay interest. So credit card companies can set APR's at a very high amount.
Generally, an APR below 21% is relatively low. Anything over 24% is more expensive. If you pay off your credit card balance in full every month, the APR won't be as important as you won't be paying interest. But if you forget and the APR is high, the interest charges will quickly rack up.
With the snowball method, you pay off the card with the smallest balance first. Once you've repaid the balance in full, you take the money you were paying for that debt and use it to help pay down the next smallest balance. This method costs a bit more in time and money, but it has psychological benefits.
To request a lower APR, call us using the number on the back of your card. We often do reviews of credit card accounts to see if we can apply better rates. Please contact us in a few months if you're not approved for a lower rate at this time.
Even people with good credit scores make mistakes, and a bank may charge a penalty APR on your credit card without placing a negative mark on your credit report. Penalty APRs typically increase credit card interest rates significantly due to a late, returned or missed payment.
This approach typically involves negotiating with credit card companies to settle your debt by making a single lump-sum payment that's lower than your current balance. However, debt forgiveness isn't a simple fix, and careful consideration is necessary before pursuing this route.
Fortunately, you may be able to combat this by simply calling your credit card issuer and negotiating a lower rate.
$5,000 in credit card debt can be quite costly in the long run. That's especially the case if you only make minimum payments each month. However, you don't have to accept decades of credit card debt.
A high APR for a credit card is one that's above the national average. Currently, the average APR is around 25%, so an APR that exceeds that is considered high.
If you're unhappy with your credit card's annual percentage rate (APR), securing a lower one may be as simple as asking your credit card issuer. The issuer may decline your request, but it never hurts to ask.
In some cases, a balance transfer can positively impact your credit scores and help you pay less interest on your debts in the long run. However, repeatedly opening new credit cards and transferring balances to them can damage your credit scores in the long run.
Contact your credit card company and explain your situation. Offer to show them your budget and tell them about any priority debts you need to pay. If you think your situation will improve in the next few months, ask your credit card company to freeze interest and other charges.
Car Loan APRs by Credit Score
Excellent (750 - 850): 2.96 percent for new, 3.68 percent for used. Good (700 - 749): 4.03 percent for new, 5.53 percent for used. Fair (650 - 699): 6.75 percent for new, 10.33 percent for used.
Card rates are so high, in part, because of the Federal Reserve. The central bank raised rates dramatically in 2022 and 2023 to fight surging inflation. But that's not the whole reason. Credit card rates are higher now than they have ever been, including times when other interest rates were higher than they are today.
Contact your credit card issuer using the number on the back of your credit card and explain why you would like an interest rate reduction. Start by highlighting your history with the company and mention your good credit and history of on-time payments.
Current Credit Card APR Averages
Use this chart to compare credit card APR offers with the average minimum and maximum APR of credit cards in the U.S. News card database. The average APR for all cards in the U.S. News database is 15.56% to 22.87%.
1. Pay off your balance every month. Avoid paying interest on your credit card purchases by paying the full balance each billing cycle. Resist the temptation to spend more than you can pay for any given month, and you'll enjoy the benefits of using a credit card without interest charges.
If you can afford to pay off your debt during the promotional APR period, a balance transfer card may be your best bet. For example, with $5,000 of debt, a six-month intro APR balance transfer card would allow you to pay off your debt interest-free with $833.33/month payments.