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Q: I’ve noticed that my interest rate for my Capital One card just went up and I’m not sure why. What can I do to get it lowered again?
A: The first thing you want to try is to negotiate with the company to see if they will lower your rate, since negotiating doesn’t cost you anything. Unfortunately, though, if your rate went up because of something you did wrong, such as making payments late, then this method probably won’t be very effective. If you have been paying your payments on time, then you might have some luck.
You can also do a balance transfer to a card with a lower rate. You may even be able to get a lower rate than the one you were getting before the rate hike. This isn’t always an option if you don’t have good credit, however. That leads us to our next option.
If you close the account, you can continue to pay the balance at the current rate. Of course, this means you can’t make any more purchases with that card. This is a good option if you don’t need that card anymore.
Finally, the best option might be to just pay off the balance. Companies are required to notify you 45 days in advance of a rate change, unless the changes are based on changes in the market rate (which usually goes up or down fairly slowly), or a result of payments that are more than 30 days late.
So that means, in most situations, you will know in advance if your rate is going to go up drastically. If you are not carrying a large balance, this may give you enough time to get the money together to pay off your debt. If you do, instead of paying interest, you will be able to earn interest.