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How to Negotiate a Lower Credit Card Interest Rate

Do your finances have you feeling stressed out? Don’t worry; there are practical steps you can take right now to save money, including lowering your credit card interest rates. Here’s how to successfully negotiate a lower interest rate with your credit card company.

How to Ask Your Credit Card Company for a Lower Interest Rate

One of the best ways to save money is to call and ask your credit card company for a lower interest rate. Here are the five critical steps involved in the process:

Check Your Current Rate

The first thing you must do is to check your current interest rate. If you aren’t sure what your purchase APR is, check your monthly statement. Your statement is available through your card’s mobile app (if possible), or on your paper statement that you receive each month.

Check Your Credit Score

Your credit score is the figure that lenders use to gauge your risk as a borrower. The most crucial factor in both a FICO Score and VantageScore (the two most popular scoring models) is payment history. Both models base around a third of a total credit score on how dependable you are to pay your monthly bills on time.

Because of this emphasis, those with a record of consistent on-time payments have a higher credit score (on average) and pose a lower risk for lenders. This reduced risk makes lenders (and credit card companies) more willing to offer better interest rates when asked.

How Does Your Credit Score Match Up with the Average APR?

Once you know your credit score and your current APR, you should know how they match up with other cardholders.

Different credit scores enjoy different interest rates. Those consumers with excellent credit get the lowest rates, while those with subprime credit scores (fair credit, bad credit, or no credit) get higher interest rates.

The interest rate you pay also depends on the type of credit card you have. Rewards cards, for example, have higher interest rates than balance transfer credit cards, which often don’t feature rewards.

Not sure how your APR stacks up against other consumers with your credit profile? The easiest way to see if you deserve a lower interest rate is to check out our “What Is the Average Credit Card APR? page, which is updated continuously.

Contact Your Credit Card Company for a Lower Interest Rate

To request a lower rate from your credit card company, just call the customer service number on the back of your card. Discuss your concerns with their agents and state that you have both excellent payment history and a solid relationship with the lender.

Here are some helpful tips for when you negotiate with your credit card issuer:

  • Have your talking points written down in advance. This tactic will help you ensure you state your case clearly.
  • Always use the credit card company’s name and not “you” when speaking with a representative.
  • Have information about your credit score, average APR, history with the company, etc. readily available.
  • Be polite
  • Be flexible

What to Do If they Deny Your Request?

What happens if your bank denies your request? Your best recourse is to ask why they reached that decision. This question can help you better understand how lenders view you as a borrower and provide you with insight to form a game plan for improving your credit score.

If your payment history is an issue, consider getting a secured credit card to help increase the number of monthly payments you make. If you choose this option, make sure to use any new credit cards for small purchases only – and pay off the balance in full every month.

Another option might be a personal loan to reduce your overall monthly payments. A personal loan can consolidate multiple credit card payments into one simple payment – saving you time and money in the long term.

Conclusion

Reducing your monthly expenses may be as easy as calling your bank and negotiating a lower interest rate on your credit card. Before you call, however, make sure to check vital information to see where you stand. Once you have all the facts you need, call and speak with confidence – and politeness. If you are persuasive enough, you might save yourself serious money on interest payments each month. Plus, you never know if you don’t ask, so give them a call today!

Related Article: How to Increase Your Credit Limit

About: Cory
Cory Santos

Cory is BestCards.com's "Jack of all trades" and resident rewards expert, covering all facets of the points game – especially travel, hotels, and airlines. In addition to credit cards, Cory finds that jogging, cats, and memes are essential parts of a balanced day.