President Trump’s proposed one-year 10 percent cap on credit card interest rates doesn’t appear imminent. But there may be steps you can take to lower your rate while paying down card balances.
The average credit card rate is about 22 percent, according to the Federal Reserve. But people with tarnished credit or a history of late payments can pay much higher rates — around 30 percent. Card delinquencies started to “flatten” last year, the Fed said. But balances rose to $1.23 trillion in the third quarter, up 5.75 percent from the same period in 2024.
More people have balances on their cards, with the average amount just over $6,500, the credit bureau TransUnion reported in November.
“People are struggling,” said Kristen Holt, chief executive at GreenPath Financial Wellness, a national credit counseling firm in Farmington Hills, Mich. Lately, she said, GreenPath has been seeing clients with budget deficits of about $500 a month.
A borrower with the average balance and interest rate would have to pay about $608 a month to pay off the balance in a year, according to a Bankrate calculator. The interest paid for the year would be $800.
If your card balances have ballooned, whether from year-end holiday spending or unexpectedly higher expenses, here are some strategies to consider.
Can I ask my credit card company for a lower rate?
Yes. “People hesitate, but it’s certainly worth considering in many cases,” said Bruce McClary, a spokesman for the National Foundation for Credit Counseling, a nonprofit that certifies groups to offer budget counseling and debt management services.
Particularly if you have been making payments on time and have strong credit — a score of 740 or higher — but are simply unhappy with your interest rate, it’s worth asking your card issuer if it will reduce your rate permanently, Mr. McClary said. If your score falls short of that level but has been trending higher, you may still have negotiating room, he said, although “it’s a bit tough if you’re below average.” (The average credit score in 2025 was 715, according to the scoring firm FICO.)
Mr. McClary cautioned that a reduction of one to three percentage points was probably the best-case scenario. Still, he said, “every little bit helps.”
Prepare by confirming the rate on your card (check a recent statement) and pulling your credit report, he said, because your lender will certainly do so. (Get your report free at www.annualcreditreport.com.) “It’s good to see what they see,” he said.
When you are ready, he said, call the customer service number on the back of your card — and be polite. If you have any blemishes on your record — say, a late payment — be prepared to explain why.
If your score has been rising, Mr. McClary said, try saying this: “I’ve been reviewing my credit and noticed my score has improved significantly since I opened this account. I’m calling to see how this qualifies me for a more competitive interest rate and perhaps a review of my current account terms.”
If that doesn’t work, he said, keep the conversation going. Ask if there are other options, like transferring the balance to a lower-rate card that the company may offer in-house. Card companies spend a lot of money acquiring new customers, he said, and don’t want to lose existing ones to competitors offering balance transfers, if the customers have a history of paying on time.
Michael Desimone, chief lending officer at Citadel Credit Union near Philadelphia, said that if a lower rate wasn’t possible, ask about making payments twice a month — tied, say, to a biweekly paycheck — instead of just once. That can help cut down on interest costs. (You can even do this on your own.)
Should I consider a balance transfer card?
If you qualify, transferring a balance to a new card with a temporary interest rate of zero can help you pay off your debt at a lower cost. Currently, banks are offering no-interest credit card promotions ranging from 12 to 21 months. Typically, you need strong credit to qualify, and you should be sure you can repay the balance in the promotional period. Otherwise, you’ll be paying double-digit interest again when the introductory rate expires.
Mr. Desimone of Citadel said it was also important to consider transfer fees, which are often 3 to 5 percent of the balance. On a debt of $6,000, the fee could be as much as $300.
What if I’m worried about falling behind on my card payments?
If you can’t make payments because of a job loss or medical problem, you can request a temporary “hardship” reduction in the interest rate or a payment reprieve, Mr. McClary of the National Foundation for Credit Counseling said. Terms can vary, he said, but typically the pause will allow time to cope with a short-term financial setback.
What if I can’t make payments for an extended period?
If you know you can’t make your payments for a longer period, you may want to consider a nonprofit credit counseling program. These programs offer free budget review sessions with professional counselors. If necessary, a counselor can also negotiate a debt management plan with your lender — usually for a monthly fee to the credit counseling agency — to help pay off balances over time at a lower interest rate.
At GreenPath, rates on debt-management plans, which typically last three years or longer, average 6.6 percent, Ms. Holt said.
To find a reputable program, check the National Foundation for Credit Counseling’s website, search at the Financial Counseling of America website or search on the Department of Justice website.
Are rates lower on cards issued by credit unions?
They often are. A rate of 12 percent was common at credit unions as of September, according to the National Credit Union Administration.
Federally chartered credit unions must abide by interest rate caps on loans and credit cards. While the maximum rate is 15 percent, the credit union administration has authorized a temporary increase to 18 percent, which is set to expire at the end of March. A spokeswoman for the credit union administration declined to comment on whether the higher rate would be extended.
Credit unions typically serve customers who meet certain criteria, such as living or working in a defined geographic area or having served in the military. You can search the administration’s online locator tool to find one near you and check its membership requirements.
How can I change my approach to credit card debt?
It is difficult for many people to face the debt they have accumulated, said Kevin Feig, a financial planner and therapist in Dover, Mass.
“There’s so much shame, grief and regret associated with debt, that it’s hard to get past that,” he said.
He encourages his clients to shift their mind-set. Consider paying off card debt, he said, to be a financial opportunity. “It’s going to lift that weight off their shoulders.”
What’s the best way to pay down card debt?
Mr. Feig said he preferred the debt “snowball” method because it offered a faster psychological reward. Borrowers pay off the card with the smallest balance first. They pay as much as they can toward that card, while making minimum payments on their other cards. When the first card is paid off, the payments shift to the next card, and so on. (The so-called “avalanche” method pays off the card with the highest interest rate first. It ultimately saves more on interest but it takes longer to eliminate the debt.)
When clients pay off a card balance, he encourages them to celebrate. “Nothing extravagant,” he said. “Maybe go out to dinner.”
What steps can I take to pay down or avoid card debt?
It’s income tax season, and many people expect refunds, said Adam Rust, director of financial services with the Consumer Federation of America, a nonprofit consumer advocacy group. The average refund is about $3,000, according to the Internal Revenue Service. Putting all or part of the refund toward card balances, he said, can make a dent in your debt.
Jamie Bosse, a financial planner in Manhattan, Kan., recommends using a “sinking” fund. Add up expected occasional costs — holiday gifts, vacations, tickets to sporting events and the like — and divide the total by 12 months. Deposit that amount monthly so you’ll have roughly what you need when the time comes and won’t have to put it on a credit card.
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