With Credit Card Rates Rising, Here’s How to Ask for a Better Deal

The Federal Reserve held the federal funds rate steady at its June meeting, but a possible hike later this year could make your credit card debt even more expensive.

Why? Although the federal funds rate technically affects lending between banks, changes to the rate are typically passed along to consumers through the interest rates offered on loans and credit cards.

So what does that mean for you? Credit card interest rates are already high — the average APR was 21% for the first quarter of this year. If the Fed decides to raise rates — which it could do to try to combat resurging inflation — you should expect your credit card APR to rise, too.

That’s why we think you should call your credit card company and ask for a better rate — pronto.

Why does my credit card APR change?

Your credit card’s interest rate, also known as an APR, has probably gone up over the past few years. Most credit cards offer a variable rate, which means the interest rate can change based on the federal funds rate, along with other factors, like the economy.

Have you checked your rate lately? If you have an unpaid balance, your card is probably charging you a surprising amount of interest compared to just a few years ago.

As recently as 2021, the average APR on a credit card was under 15%, according to the Federal Reserve. But over the past few years, it has climbed at breakneck speed, and now the average APR is 21%.

You don’t have to sit still for this. Just take a little initiative and call your credit card provider.

Don’t be chicken. The phone number for customer service is right there on the back of your credit card.

You have nothing to lose!

Just Ask for a Lower Rate

Look at your latest credit card statement. Check your credit card’s interest rate. If you have more than one credit card, check all your cards.

If you’re unhappy with your APR, ask for it to be lowered. Do this for each of your cards.

A few things to keep in mind:

• If you have a history of making your monthly payments on time, make sure to mention that.
• Are you getting any offers in the mail from other credit card providers? Make sure to mention that, too. Your credit card company doesn’t want to lose your business.
• Do a little homework before making that call. See if you can find a better offer for a comparable credit card — one that’s roughly similar to yours.
• If you’ve had the same credit card for a long time, mention what a loyal customer you are.

The worst thing they can do is say “no.” Big deal.

How to Pay Off Credit Card Debt

It’s worth trying this because credit card debt is some of the most expensive kind of debt you can have. Credit cards typically charge you higher interest than mortgages, car loans, personal loans or lines of credit.

Most credit cards have a variable interest rate that generally follows what the Federal Reserve does, and the Fed raised rates 11 times since the pandemic to fight runaway inflation. After inflation started to cool in 2024, the Fed lowered rates five times. But the last cut was in December — it’s held rates steady since. And with inflation showing signs of reheating, some experts expect the Feds to raise rates again by the end of the year. That’s why you can expect your credit card APR to go up, not down — at least for now.

If possible, the best thing you can do for yourself is to avoid leaving an unpaid balance on your credit card, month after month. Those interest payments add up.

We have a whole guide for how to pay off credit card debt.

Here are three strategies to consider.

• Get a balance transfer credit card. If you have good to excellent credit (typically a FICO score of 670 or above) and can feasibly pay off your debt within a year, a balance transfer credit card is a solid option. Transfer the balance of a card with a high interest rate to a card that’ll charge you 0% interest for 12-18 months.
• Get a debt consolidation loan. If you get a loan with a lower interest rate and pay off your credit cards, that lower rate could potentially save you thousands of dollars in interest. This is a realistic way to pay off credit card debt if you currently have little or no money to put toward it. It’s easier than you think to get a personal loan online or from your bank. If you’re a homeowner, you might think about a home equity loan.
• Follow a debt repayment strategy. Two popular ways to break down debt repayments are the debt avalanche and debt snowball methods. Using the debt avalanche method, you’ll pay off your highest interest card first. With the debt snowball method, you’ll pay off the smallest balances first.

Remember, don’t get stuck in the credit card trap. Nowadays, swiping that plastic is pricier than ever.

Mike Brassfield ([email protected]) is a former senior writer at The Penny Hoarder. Senior managing editor Tiffany Wendeln Connors updated this post for June 2026.