Credit card rates are brutal. Experts say a phone call may cut yours

The average credit card borrower is getting squeezed from two sides: bigger balances and punishing interest.

TransUnion reported that the typical consumer now has a credit card balance of $6,577. CBS News has reported that the average credit card rate is close to 22%, which can turn a carried balance into a fast-growing bill when interest keeps piling on.

Financial experts told CBS News there are several ways borrowers may be able to bring those rates down, though each option comes with trade-offs.

Call the issuer and ask

Kim Chambers, credit card product manager at Georgia's Own Credit Union, said many cardholders skip the most direct move: contacting the company behind the card and asking for a lower rate.

Chambers said borrowers should first compare their current rate with other offers from the same issuer and competing cards. That information can help when asking for a better deal.

She also said cardholders should be current on payments before making the call, because issuers are more likely to work with customers whose accounts are in good standing.

Chuck Czajka, a certified financial fiduciary and founder of Macro Money Concepts, said some card companies are open to cutting rates now. He said borrowers can call the customer service number on the back of the card and ask whether the issuer can lower the rate, adding that good credit can help.

Chambers advised asking for the retention department, which handles efforts to keep existing customers. She said borrowers can point to their payment record, how long they have had the card, their credit score and any other accounts they hold with the issuer.

Use a balance transfer offer

Experts also pointed to balance transfer cards, which let borrowers move debt from one card to another with a lower promotional rate. Some offers carry a 0% introductory rate for a set period.

Chambers said this can work well for borrowers who qualify for a long 0% promotion and can pay off the balance before that period ends.

Fees matter. CBS News reported that many balance transfer cards charge an upfront fee of 3% to 5% of the amount moved, so borrowers need to compare the fee with the interest savings.

Compare cards before applying

Grant Gallagher, director of financial wellbeing at Affinity Federal Credit Union, said a strong credit card rate depends on the borrower’s credit profile and card type. He said credit unions generally offer lower rates than many banks and retail cards.

Credit scores can also shape the rate on a new card. Chambers said borrowers in top-tier credit categories may find rates as low as 17% in the current market, below the average paid by typical borrowers.

Consider debt relief only after other moves

For borrowers who cannot keep up with payments, Czajka said debt relief may be an option for people with low credit ratings or unaffordable bills. He noted that debt relief companies usually charge fees, but said it could be the next step before bankruptcy.

Debt relief companies may try to negotiate rates or balances, settle debts for less, seek limited forgiveness or arrange a debt management plan, according to CBS News. Those efforts are not guaranteed to work.

Martin Baker, director of financial planning at Canby Financial Advisors, said professional debt relief should generally come after failed attempts to work directly with creditors. He said one common marker is when credit card debt is more than half of a borrower’s income.

The takeaway from the experts is plain: high-rate credit card debt gets more expensive the longer it sits. Calling the issuer, comparing offers, using a transfer card or seeking help can all be worth weighing before interest keeps compounding.

This story draws on original reporting from CBS News.