Credit card rates are high, but there are ways to lower yours this February

Credit card rates have quietly drifted higher in recent years, and — unlike many other borrowing options — rates on these short-term borrowing tools have stayed elevated, despite the overall rate environment easing substantially. Right now, for example, credit card APRs are averaging nearly 23%, and it's common for cardholders to have rates that are substantially higher than that. That means if you're carrying any balances on your credit cards currently, it's easy for the interest charges to compound quickly, turning what once felt manageable into financial quicksand. 

What many borrowers may not realize, though, is that they aren't necessarily stuck paying interest at the rate that's printed on their credit card statements. In fact, credit card interest rates can be a lot more flexible than many borrowers realize. The key, though, is knowing which strategies actually reduce your rate, which lower your interest costs in other ways and which are worth pursuing right now. So, how exactly can you start bending high credit card rates back in your favor? The strategies outlined below can help.

Find out what types of debt relief you could qualify for here.

4 ways to lower your credit card rates this February

Depending on your credit profile, balances and financial situation, there are several realistic ways to reduce what you're paying, either by lowering your rate directly or by shrinking how interest is calculated. Here are a few worth considering this month:

Enroll in a debt management plan

Enrolling in a debt management plan through a credit counseling agency is one of the most reliable ways to reduce credit card interest rates quickly. These plans, which are tailored to your unique financial situation, can result in paying a lot less interest on what you owe.

When you enroll in a debt management program, a credit counselor works with your creditors to try and negotiate lower interest rates and fees, which can result in dramatically lower APRs. In some cases, your rate could even drop into the single digits, falling from 23% (or higher) to 8% or 9%.  

While your credit card accounts are usually closed to new spending during this process, the trade-off is predictable payments and meaningful interest relief. This can be especially helpful for borrowers who are stuck dealing with multiple high-rate cards that they're struggling to pay off at rates currently sitting in the double digits.

Learn how to get rid of your high-rate debt for less now.

Ask about a hardship or relief program

If you're dealing with serious financial stress, such as income loss, medical expenses or rising living costs, many card issuers offer temporary hardship programs that are designed to help make your credit card debt more manageable. While it varies, the relief you're offered via a hardship program often includes reduced interest rates, waived fees or temporary payment adjustments. 

The rate adjustments you'll get are often time-limited, but even a few months of lower interest can make a noticeable dent in your balance. So, if you have a verifiable hardship that's making it tough to keep up with your credit card debt, try reaching out proactively and ask about the help available to you. Card issuers are far more likely to offer concessions before accounts fall behind, so asking early could benefit you.

Transfer balances to a lower-rate card

Balance transfers are one of the fastest ways to escape high APRs. These types of cards offer introductory 0% APR periods or significantly reduced rates for transferred balances for anywhere from 12 to 21 months on average, allowing you to pause or reduce interest long enough for your payments to make real progress. 

The catch is that you'll have to qualify for a balance transfer offer to take advantage of this strategy. Approval typically requires good to excellent credit, and balance transfer fees of 3% to 5% will also typically apply. When used strategically, though, a balance transfer can save hundreds or even thousands of dollars in interest over the promotional period.

Ask your issuer for a lower rate

Calling your issuer and requesting a lower APR can also be worth considering, especially if you have a history of on-time payments or a stronger credit profile than when you first opened the account. That may sound simple, but many cardholders never ask. They should, though, as dropping your APR by a few percentage points reduces how much of your payment goes to interest instead of principal, which can have a big impact over time.

The bottom line

High credit card rates are a real challenge in today's economy, but they aren't an insurmountable issue, either. Whether you're negotiating directly with your issuer, using a structured repayment plan or shifting balances to a lower-cost option, there are ways to regain control over what interest is costing you. The most important step, though, is to act before your balances spiral further. The sooner you reduce your rate, the faster your payments start working to your benefit.