If you were hoping the Federal Reserve’s recent rate cut, its first of 2025, was going to make your credit card debt easier to pay off, the reality is that there are many other, more important, factors at play.
Credit card rates are influenced by things like your credit score, your monthy payment amounts, your card type and issuer — “most of which have nothing to do with what the Fed does,” credit specialist John Ulzheimer, formerly of FICO and Equifax, tells CNBC Select. “I’d say, in the grand scheme of things, card users aren’t going to benefit much, if at all [from the Fed’s rate cut].”
If you pay interest on your credit card because you carry a balance month to month, there are some better ways to lower your rate and get rid of that debt once and for all. Let’s dive into it.
Call your card issuer and ask for a rate reduction
A more effective way to lower your credit card interest rate than waiting and hoping it will align with the Fed’s benchmark moves? Call the customer service number on the back of your credit card and request a lower rate. Even if you carry a balance month to month, if you have been making at least minimum payments on time each month, you have a strong and consistent track record to show for.
Improve your credit
Your creditworthiness, aka your credit score, is the “primary driver” of how high or low your interest rate is, Ulzheimer says. The better your credit, the less your debt will cost you. Since your payment history — whether you pay on time or late — makes up 35% of your credit score, it’s the most important factor.
Experian Boost is a free tool that can instantly boost your credit score. It lets you add on-time payments of household bills like rent, utilities, cell phone and insurance to your Experian credit file.
Experian Boost®
Cost
Free
Average credit score increase
13 points, though results vary
Credit report affected
Experian®
Credit scoring model used
FICO® Score
Results will vary. See website for details.
How to sign up for Experian Boost:
Connect the bank account(s) you use to pay your bills
Choose and verify the positive payment data you want added to your Experian credit file
Receive an updated FICO® Score
Learn more about eligible payments and how Experian Boost works.
Transfer your balance to a card with no interest
Balance transfer credit cards offer introductory interest-free periods where you can work on paying down your debt over time without accruing additional interest. Balance transfer periods can last anywhere from 15 to 24 months, giving you at least a year to two years to pay off your credit card balance.
The U.S. Bank Shieldâ„¢ Visa® Card offers an introductory no-interest period of two years, then 17.74% to 28.74%. To qualify, you’ll need to transfer the balance in the first 60 days. The balance transfer on this card costs 5% of the balance, which is pretty standard. Transferring a credit card balance of $10,000, for example, would cost $500.
To be sure your $10,000 balance is gone by the end of the two years (once the 0% intro APR period is up, interest kicks back in), split evenly you’d pay $417 per month for 24 months, with zero interest accrual.
U.S. Bank Shield™ Visa® Card
CNBC Select Rating
4.5
Personal and small business credit cards issued by U.S. Bank are currently not available on CNBC Select. Click “Learn More” to review other credit card offers.
CNBC Select Rating
4.5
Personal and small business credit cards issued by U.S. Bank are currently not available on CNBC Select. Click “Learn More” to review other credit card offers.
Spotlight
U.S. Bank cards are currently not available on CNBC Select but you can check out our marketplace to compare offers from other issuers including American Express and Chase.
Credit score
Good to Excellent670–850
Regular APR
See terms
Annual fee
See terms
Welcome bonus
See terms
*See rates and fees, terms apply.
Best-in-class intro-APR offers for purchases and balance transfers
No annual fee
Annual statement credit
Cell phone protection
Rewards limited to eligible travel purchases made through the U.S. Bank Rewards Center
No welcome bonus
Has a foreign transaction fee
No intro balance transfer fee
Information about personal and small business credit cards issued by U.S. Bank has been collected independently by CNBC Select and has not been reviewed or provided by the issuer prior to publication.
Consolidate your credit card debt
Many personal loans are used for debt consolidation, which allows borrowers to exchange a high-interest credit card balance for a lower-interest form of debt, with one fixed payment each month. The average rate on a personal loan is around 12%, nearly 8% less than the average rate on a credit card.
There are options even if your credit isn’t great: Avant Personal Loans, for example, accepts FICO® Scores as low as 550, and it provides loans from $5,000 to $35,000 that can be used for debt consolidation.
Avant Personal Loans
Annual Percentage Rate (APR)
9.95% to 35.99%
Loan purpose
Debt consolidation, major expenses, emergency costs, home improvements
Loan amounts
$2,000 to $35,000
Terms
24 to 60 months
Credit needed
Poor/Fair
Origination fee
Administration fee up to 9.99%
Early payoff penalty
None
Late fee
Up to $25 per late payment after 10-day grace period
Click here to see if you prequalify for a personal loan offer. Terms apply.
Pros
Lends to applicants with scores lower credit scores
No early payoff fees
Can pre-qualify with a soft credit check (no hard inquiry)
Quick funding (often by the next day)
Late payment grace period of 10 days
Cons
Origination fee
Potentially high interest (caps at 35.99% APR)
No autopay APR discount
No direct payments to creditors (for debt consolidation)
No co-signers
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every savings article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of banking products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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