Are you paying enough attention to your credit card’s APR?

12.08.2024 - 17:28 / thepointsguy.com

The No. 1 rule for a winning credit card rewards strategy has nothing to do with comparing welcome offers or maximizing redemption value from your points. Instead, it's much simpler — pay your balance in full every month.

As easy as that guiding principle sounds, following it can be much more challenging. The average household credit card debt in 2023 was $6,501, according to data from Experian. Owing debt can negate the value of any points or cash back earned, particularly in today's environment where credit card interest rates are high.

Hopefully, you're already following the most important of our credit card commandments. But even if you are, you never know when you'll accidentally miss a payment or get hit with a large purchase that takes you a bit longer to pay off. Because of this, you still need to keep an eye on your annual percentage rate (APR).

In this guide, we'll provide some helpful tips on what to look out for when it comes to your credit card's APR.

Related: How to earn points and miles with a low credit score

The bank that issued your credit cards can change your interest rate at any time and you likely won't receive a notification about it.

You've probably received plenty of emails from the bank on how to use your rewards points and why you should use your card's mobile payment system, but we're willing to bet you haven't received any reminders to monitor your APR or notifications that it's gone up.

While frustrating, this makes sense. Banks aren't looking for opportunities to call attention to the fact that you might have to pay them more. But as interest rates have risen, many credit card interest rates have risen along with them. If you haven't checked your APR recently, you might be surprised to learn what it is today.

This is why it's important to check your card's APR regularly and stay on top of these changes. Additionally, noting an increasing APR will motivate you to pay your bills on time and in full.

If you notice that your APR has increased and you've been a loyal, low-risk customer, it can be worth your time to give your issuer a call and try to negotiate a lower rate.

Rather than simply asking for better terms, we recommend reviewing some of the preapproved offers you receive in the mail. Consider the APR ranges for your card — if the offer starts at a lower interest rate, mention it to the customer service representative. Just as airlines and hotels are willing to match elite status to appeal to customers, banks and card issuers may be willing to budge to retain customers.

If you've been carrying debt on your card from month to month, you may not have luck asking for a lower interest rate. Plus, knocking down your interest rate a couple of percentage points won't make