Fact Checked

How do I Reduce a Credit Card Finance Charge?

Alex Tree
Alex Tree

There are multiple ways to reduce a credit card finance charge, from simply asking the credit card company to never being late to pay the bill. First, stop charging the credit card if you cannot pay it off every month in addition to never missing a payment. By doing these things, you end up paying no finance charge each month, plus showing the credit card company that you are reliable and deserving of a credit card finance charge reduction. Next, call the credit card company to ask for a reduction or send the company a letter in writing. You can also get a consolidation loan, but this should be a last resort, especially if you might be tempted to max out the credit cards all over again.

For many people, a credit card finance charge is an everyday bill; it is a responsibility that comes with owning a credit card. If you pay off the credit card bill each month, however, you actually do not pay a finance charge at all. In some cases, a credit card comes with a yearly charge, in which case this fee must be paid every 12 months. While paying the bill in full is essentially a method of reducing a credit card finance charge to zero, this option is not available to people who cannot afford to make the full payment. For these people and those who want to reduce finance charges just in case, there are other options.

The terms of a credit card.
The terms of a credit card.

Even if you cannot pay off the credit card bill, you can prove yourself reliable by never skipping a payment. In addition to looking good to the credit card company, you avoid paying annual percentage rate penalties. These penalties are typically applied to accounts that make a late payment. They can double or even triple the amount of interest you normally pay.

Contacting the credit card company is one way to reduce a finance charge.
Contacting the credit card company is one way to reduce a finance charge.

Another way to reduce a credit card finance charge is to simply ask by calling customer service. Depending on the credit card company, you might also be able to do this online or by letter. Some people report having more luck talking to a person on the phone rather than through email. If turned down for a reduction, try a different method of asking or just ask later.

Lastly, a consolidation loan is basically getting a loan to pay off your credit card balances. The loan must have less interest than the credit cards for this method to work in your favor. Once the balance is gone, you no longer pay a finance charge for that credit card. You are now responsible for paying off the loan in addition to keeping the balance paid on your credit card each month. If this might prove a difficult task, acquiring and maintaining a consolidation loan might be too risky to attempt.

You might also Like

Discussion Comments


I think that we should be able to use credit cards freely, but we should not have APR on it, because when credit cards have APR on them, people cannot afford the most important things, for example, food and clothes for your children.

We should learn about APR rates at schools. My child is starting secondary school, and they don't teach her the important things, like how to figure out the APR on something, like on store cards. We should get the secondary schools to teach this before we become a bankrupt country and our economy becomes so bad we have to move elsewhere.


@Suntan12 -I agree. I think that setting up a budget can help you pay off the credit cards so that you no longer pay any finance charges. Sometimes taking an active approach to your budget can help you save money in some areas that you can apply toward your credit card bills.

Setting up an envelope budget is helpful because you designate a set amount for your fixed and variable expenses and every category has an envelope with the amount that is to be used. I think that if you allocate all of your take home pay to a category it will reduce the impulse spending on your credit cards and will help you pay them off faster.

Then if you want to pay off the credit cards faster you can get a second job that will help you pay down your debt. This also provides a great sense of accomplishment that will allow you to take control of your finances for the rest of your life. This is what I have done and have never looked back.


@Latte31 -I wanted to add that I know that credit card consolidation is another option. Some people get a home equity line of credit in order to avoid these higher interest rates. While it sounds like a good idea, the potential problem that I see is that credit card debt is unsecured while a home equity line of credit is a secured debt.

This means that credit card companies cannot take your home or force you to sell it to satisfy the debt, but with a home equity line of credit they can.

Another potential problem that you can have involves using the credit cards that you just paid off and developing credit card debt along with the debt associated with the home equity line of credit. This is why you have to be careful with home equity lines of credit for the purpose of credit card debt consolidation.


I also think that you could apply for a credit card with a zero percent introductory interest rate and transfer you balance over and try to pay it off before the interest rate resets on the card.

I get these credit card offers in the mail all of the time. If you cannot get your existing bank to lower your interest rate then this is the next best thing. Apply for the credit card but read the fine print and make sure that there are no hidden credit card fees.

Post your comments
Forgot password?
    • The terms of a credit card.
      By: Kreative Photography
      The terms of a credit card.
    • Contacting the credit card company is one way to reduce a finance charge.
      By: bradcalkins
      Contacting the credit card company is one way to reduce a finance charge.