The Credit Guy

Your options for reducing a high credit card APR

The Credit Guy columnist Todd Ossenfort

Todd Ossenfort has been chief operating officer for Pioneer Credit Counseling since 1998. He writes our weekly “The Credit Guy” column, answering reader questions about credit counseling and debt issues.

Ask a question.

Question for the expert

Dear Credit Guy,
I have a couple of credit cards with 29.99 percent interest rates. The rate is high because I was not timely with payments over a year ago. I called and asked them to reduce the rate, but they gave me a song and dance, basically telling me, “Sorry, bud.” Anything I can do? I am trying to pay them off ASAP, but I sure would like to have that rate reduced. — Greg

Answer for the expert

Dear Greg,
Congratulations! Way to go on your efforts to pay off your credit card debt. I agree that it would be better if you could get your interest rate reduced. Doing so would allow you to decrease the total amount you will need to pay back and also decrease the time it takes to be free of this debt. Let’s review some options for getting a better interest rate on your debt.

You have already tried the first option: contacting your creditors directly to see if they would lower your interest rate. Since you were unsuccessful, we’ll move on to option No. 2.

Next, you might consider transferring your balances to a credit card or cards with a more reasonable interest rate. You can begin shopping for the card(s) that would work best for you on this site. Be sure you keep in mind there might be transfer fees associated with moving a balance to a new card you choose. To give you an idea of what you can save, let’s say your balance is $5,000 and you are making a $250 payment each month. At your current interest rate of 29.99 percent, it would take you 29 months to pay off the debt, and you would pay $2,017 in interest charges. Lowering your interest rate to 12 percent making the same payment of $250 on your $5,000 balance, you would be debt free in 23 months and pay only $607 in interest.

I can’t tell by your question whether you are a homeowner, but a home equity line of credit (HELOC) might be option No. 3. HELOC interest rates are currently very low. One thing to keep in mind regarding a HELOC is you’re taking an unsecured debt and turning it into a secured debt with your home being the collateral.

If your credit is not good enough to qualify for a credit card(s) with a more reasonable interest rate, and you are struggling to make the payment, you could consider option No. 4, credit counseling. You can contact a reputable nonprofit credit counseling agency at or Counseling can be completed by phone, online or in some cases in person. Your counselor will ask what goals you have for your financial situation and will perform a thorough review of your finances. The counselor will let you know if you qualify for a debt management plan (DMP) and how much your interest rate would be reduced should you decide to enroll in a DMP. Creditors are more willing to lower interest rates for persons on a DMP.

The one downside to enrolling on a DMP is that the credit card accounts that you enroll in the plan will be closed, and you will no longer have access to any available credit on those accounts. Your counselor will outline everything for you, including the fees to participate in a DMP, which are regulated by the state in which you live and should be no more than $75 to enroll and no more than $50 per month. Also, some creditors report to the credit bureaus that your account is in a DMP, but the notation is not considered when calculating your credit score.  

Take care of your credit!

See related:Balance transfer or loan? Do the math before you decide, 9 things you should know about balance transfers, After creating a debt management plan, stick to it, 15 questions to help you find the right credit counselor, 8 things you must know about credit card debt

Meet’s reader Q&A experts

Does a personal finance problem have you worried? Monday through Saturday,’s Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.

What’s up next?

In The Credit Guy

7 ways to ensure a financially successful marriage

Tying the knot? Know that finances are one of the top five reasons for divorce. Here's how to keep your money and marriage together

Published: August 30, 2010

See more stories
Credit Card Rate Report Updated: April 21st, 2019
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.