A government-mandated cap on credit card interest rates removes lenders' ability to price for risk. Consequently, they may stop lending to individuals with lower credit scores, inadvertently forcing these borrowers to seek much worse options like payday or title loans with triple-digit interest rates.
Many credit card holders are unaware they can directly negotiate their Annual Percentage Rate (APR). By calling the issuer, referencing their loyal payment history, and mentioning competitor offers, customers can often secure a lower interest rate. This ten-minute call could potentially save thousands of dollars over time.
Strategically accepting a credit line increase while keeping your balance the same lowers your credit utilization ratio—a key factor in credit scores. This improved score can unlock access to better financial products like lower-rate balance transfer cards or consolidation loans, effectively using credit to fight debt rather than fuel it.