The Federal Reserve raised interest rates for the first-time in nearly seven years this December, citing improvements in the economy. That means anyone with a variable-rate credit card might see their annual percentage rate go up. But you don’t have to weather the storm: Depending on your spending habits and financial health, there may be ways to score a lower APR in 2016. Here’s how.
1. Raise Your Credit Score
A good credit score entitles you to the best terms and conditions on competitive credit cards (and other financing), so getting yours in tip-top shape can help you secure a lower APR. You may want to check your credit to see where you stand and what areas you need to improve. (You can do so by pulling your credit reports for free each yearat AnnualCreditReport.com and viewing your free credit report summary, updated each month, on Credit.com.) Generally, you can improve your scores by making all your payments on time, keeping debt levels low (below 30%, and ideally 10% of available credit), removing errors and limiting credit inquiries.
2. Call Your Issuer
Once you’re sure your score is sound, you may want to call your issuer to see if they’ll lower your existing rate. Keep in mind they’ll be more apt to do so if you’ve shown you’re a responsible cardholder who uses the card regularly. If your issuer doesn’t agree, you can always try again later. You may find success with a different customer service agent.
3. Comparison Shop
If you’re not getting anywhere with your current issuer — or think it’s time for a new piece of plastic — you can shop around for a new credit card. You could look for a low-interest credit card or a balance transfer credit card, which lets you transfer an existing high-interest debt to a new card with little-to-no interest for a period of time (typically 12 to 18 months). Just be sure to review the terms and conditions carefully — balance transfers typically have fees and there may be caveats, such as retroactive interest if you don’t pay off the balance within the 0% window. You’ll also want to know what you’ll owe in fees and interest on all cards you’re considering. Each credit card application tends to generate a hard inquiry on your credit report, which can ding your score, so it’s best to keep those to a minimum.
This article originally appeared on Credit.com and was written by Jeanine Skowronski.