The majority of credit card companies offer three tiers of interest rates to their customers. These interest rates have been labeled as elite, premium and standard. For the most part, those with the highest credit ratings are offered elite credit card interest rates, and those with lower credit ratings are offered premium to standard interest rates on their credit card.

Many card holders are unaware that the interest rate can be adjusted, even after the account has been open and active for an extended period of time. There are many factors that can allow for an increase in interest rate, these are: if payments have been late one to two times, if there have been missed minimum monthly payments on the account, or if payments have been defaulted upon completely. Most often, when a card holder has defaulted upon payments, interest accrues at rates upwards of thirty percent, the maximum interest rate which is charged by the credit card company.

On the other hand, if you have been privy to falling credit scores, you, as the card holder could be liable to paying a higher interest rate. The lower the credit score of the cardholder, the higher the risk to the lending institution, therefore a higher rate is charged to the customer. At this point, the credit score should be increased using methods such as account history, the repayment of debt and the limiting of new accounts which are added to the credit file. These new accounts deplete the history, an important portion of the credit score.

At the other end of the spectrum, those customers that have improved their credit history or have developed good standing with the credit card company can also be granted lower interest rate. A simple phone call the company can yield lower interest rates for the cardholder; all you have to do is ask!

Interest rates are only one of the reasons to maintain the value of your credit score. With the current state of the economy, those with the lowest credit ratings are subject to rejection notices from credit cards, mortgages and even vehicle loans. A low credit score can cost you more than you think, and therefore it is important to keep the score high to maintain the value and health of you personal financial history.

One you get stuck with a bad credit score, digging out can be hard.  There are a few products available on the market for helping people regain their good credit, but it takes some time and concentration to do the right steps and avoid credit scams.

First, you can call your credit card companies and try to get your card payments reduces, get your interest rate lowered, or otherwise get some kind of payment holiday.  This can help you direct cash toward other expenses like food and gas for the car.

Next, you should close as many cards as  you can. Having fewer cards helps build your credit score.  And lower balances – not being maxed out on any card – also helps improve your credit score.  By getting some concession from your credit card company, you’ll have extras cash to put toward the principal each month instead of just making the minimum payment.

Third, try not to take the step of borrowing more money to pay off cards.  This usually backfires, as the borrower pays off balances, leaves the card active, and continues to charge on the card that was supposed to be closed.  Unless you are getting a good low interest deal, don’t take this step unless you are committed to closing the credit card account immediately when you pay it off.  You can also close an account that still has a balance; some card companies will then close the card automatically once the balance reaches zero.

Fourth, find a way to pay more than the minimum each month.  List your credit cards and other debts in order of highest interest rate to lowest. Starting with the first card, figure out how much extra you can pay toward debt each month. For example if you’re willing to skip  your manicure appointment each month, you can put the $25 toward your most pressing payment.  This helps reduce the principal balance, reduces your interest, and gets the card paid off faster.  In turn, your credit score starts to improve as well.

Last, don’t take out any more credit cards!  If your credit is so bad that you can’t get approved, look on this as a blessing in disguise, because it will force you to live with the cash you bring  home each month.  Once your credit cards are paid off, and having learned to live on what you earn, your income will be all your own to invest and grow wealth for yourself and your family.  Look forward to the day in the future when your payment plan will make that happen.