Credit card interest rates are surging: How to lower yours now

There's no question that credit cards can make it easy to pay for purchases over time, whether for an unexpected expense or an impulsive buy. However, carrying a balance on your credit card has become an increasingly expensive choice. Credit card interest rates are among the highest available for any borrowing option and the compounding nature of credit card interest makes it even more costly over time. 

Today, card interest rates are higher than ever, with the average credit card interest rate now sitting at 23.37%, according to the Federal Reserve — a considerable increase from just a few years ago. For example, in August 2022, the average credit card rate was 18.43%, while in August 2020, it was 16.43%. This means that if you're using credit cards to finance purchases right now, you're paying significantly more in interest than you would have been just a few years ago. 

And while Fed rate cuts, such as the one issued in September, typically help to lower the rates on many types of consumer borrowing, like mortgages and personal loans, they generally have little impact on credit card interest rates. So while there are expectations that the Fed will slash its benchmark rate again in November, it's unlikely that this rate cut, or any other upcoming rate adjustments, will offer meaningful relief. However, there are still several ways you can try to lower your credit card interest rates now. 

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How to lower your credit card interest rates now

There are a few ways to try and lower your credit card rates to save money on interest, including:

Negotiating with your card issuer

One straightforward way to reduce your credit card interest rate is to ask your card issuer for a lower rate. Many credit card companies are open to negotiating with long-standing customers, especially those with a history of on-time payments, so a well-prepared conversation with a customer service representative may result in a lower rate, allowing you to save on interest over time. 

When contacting your card issuer, it can help to be prepared with information about your payment history, account tenure and current credit score to support your request. If you've received competitive offers from other card issuers, make sure to also mention them during your call to see if your current issuer can match or beat those offers. 

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Taking advantage of what a debt management program offers

A debt management program is another potentially effective way to secure a lower interest rate on your credit card debt. When you enroll in a debt management program, a financial expert will negotiate with your creditors to reduce interest rates and potentially waive certain fees. That's the objective of this type of program, after all: To make your debt more manageable by lowering your monthly payments and overall interest charges.

It's important to note, however, that program participation typically requires you to close your credit card accounts, which may temporarily impact your credit score. These programs also frequently come with enrollment fees, so consider the associated costs and benefits carefully. 

Exploring your credit card hardship program options

Credit card hardship programs are short-term relief options offered by many credit card companies for borrowers who are facing financial difficulties. If you're trying to lower your credit card interest rate due to a job loss, medical expenses or other significant financial challenges, enrolling in a hardship program may help. Doing so can also reduce or waive card fees and secure a lower minimum payment.

However, the terms of these programs also vary by issuer, so it's a good idea to contact your card provider, explain your circumstances and inquire about the options available. If you find you qualify, the short-term reduction in interest can offer meaningful relief.

Utilizing other debt relief strategies

If you're looking to lower the cost of your credit card debt, you can also consider transferring your balances to a new card with a lower rate or consolidating your debts with a debt consolidation loan. Both options can reduce the overall rate you pay on your credit card debt.

For example, many balance transfer cards come with introductory 0% APR periods that last between 12 and 21 months. By moving your high-interest debt to a balance transfer card, you can avoid paying interest temporarily. A debt consolidation loan, on the other hand, allows you to combine multiple high-interest debts into a single loan with a lower fixed interest rate, which can make repayment more manageable. 

The bottom line

With credit card interest rates at record highs, reducing them can feel challenging but is well worth the effort. Starting with a simple call to your card issuer may yield surprising results, while balance transfers, debt consolidation loans and other forms of debt relief can offer additional pathways to financial relief. A credit card hardship program or debt management program may also provide much-needed assistance if you're struggling with temporary financial hardship. No matter which approach you choose, by taking steps now to reduce your interest rate, you can put yourself on better financial footing.