4 Proven Ways to Get a Lower Rate On Your Credit Card

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Do you have credit card debt and want to figure out how to get a lower interest rate to make it easier to pay it off? The average American has over $6,000 in credit card debt, according to credit reporting company Experian. This figure is up roughly 3% from 2017.

Overall credit card debt has never been higher. The Federal Reserve reports that there is now more than $1 trillion dollars of credit card debt in the U.S. Sky high credit card interest rates are one reason it’s so hard for people to pay off their credit card debt.

That’s why it’s incredibly important to find ways to get a lower APR on your credit card. Otherwise, you’ll be paying off the credit card for what feels like forever.

If you want to get a lower rate on your credit card but aren’t sure how don’t worry, I’ve got you covered.

It’s Absolutely Possible to Get a Lower APR

Blue credit cards sitting on a silver laptop next to pens and a wallet with more cards inside

Have you wanted a lower APR but aren’t sure how to do it? Or, are you worried that you won’t get approved for a lower rate? If so, you’re not alone.

Most people never even try to get a lower rate for two reasons:

  • They don’t know it’s possible
  • If they do know it’s possible, they fear rejection

That’s the conclusion of a CreditCards.com survey that polled 1,589 credit card holders in the United States. Participants were asked if they had ever tried to get their card issuer to:

  • Waive a fee
  • Raise credit card limits
  • Reverse a late payment fee
  • Lower a credit card interest rate
  • Reduce credit card annual fees

The survey found some great results:

  • 56% of people who asked got a lower interest rate (APR).
  • 70% of people who asked got an annual fee waived or lowered.
  • 84% of people who asked got a late fee waived.
  • 85% of people who asked received a higher credit limit.

These are great success rates! Start using these ways to get lower rates on your credit card and start paying off debt quickly and easily.

4 Ways to Get a Lower Rate on Your Credit Card

As shown in the survey above, most people aren’t aware they can contact credit card issuers to take advantage of all of these offers. But before you start contacting them asking for credit increases and waived fees you should get prepared.

It’s important to get your credit score in decent shape before asking for favors. As the results showed, it’s not a 100% guarantee that your requests are met just by contacting the card companies.

Before getting started, it’s important that you know the following:

  • Your credit score
  • How long you’ve owned the card
  • If you’ve made a late payment, and how recent it was
  • Credit utilization on this card and other credit cards (how much you owe divided by your credit limit(s))

If you know all of these items, it’ll make the call to your credit card issuer easier and less stressful. Plus, it will increase your chances of getting your request(s) met.

Here’s how to prepare for the most common requests.

1. How To Ask For a Reduced Interest Rate

How high is your APR on your credit card? 10%, 15%, or 20%+? Ask yourself, how much easier would it be if it were a few percentage points lower.

If you’re like most people, having a lower interest rate can make a huge difference and speed up the process of zeroing out your credit card debt. When you contact a credit card company to ask for a reduced interest rate, try to follow the script below for the call.

One thing to note in advance: Always be nice! Nice people tend to get treated better and have more requests met than someone who is rude, condescending and impatient.

While it’s easy to get worked up talking about your finances, remember there is a human being on the other line. And it’s not their fault you owe as much as you do.

Do Your Own Research

If you’re like me, I’m sure you get endless credit card offers in the mail and email. It’s important that you do your own homework before contacting your credit card provider.

Ideally, you want to have two or three offers from other issuers that you can use as leverage in the upcoming conversation. If you’ve opted out of having those offers sent by mail, make sure to check out available credit offers online before the call.

After all, the credit card company wants to keep your business rather than having to find a new customer. They’ll often agree to a rate that matches or is close to one offered by their competitors.

When talking about other offers or your own credit history, it’s important not to lie. These customer service reps can access your credit card history on the phone, so there’s no point in fibbing.

How to Get a Lower Rate On Your Credit Card (Script)

Start by calling the number on the back of your credit card. Then say the following:

“Hi, my name is (INSERT NAME) and I’ve had an account with your company since (Insert date). I’ve made an effort to make on-time payments, and I spend X  dollars per [month/year] on this card.

Lately, I have received several offers in the mail from other credit card companies with much lower interest rates. (You can even mention a few of these offers.) I’d like a lower interest rate on my card or I intend to switch cards and cancel my current one. Would you be willing to match that offer?”

Remember, you have the power here, not them. And by the way, I don’t recommend canceling your credit card before you’re sure you can get one with a lower rate. Instead, use this subtle threat is an easy way to gain leverage.

Usually, sticking with a card you already have is a better deal than opening a new card entirely. Each time you open a new credit card, you have a hard pull on your credit record, which dings your credit score. The more hard pulls you have, the more of a negative impact they’ll have on your credit score.

Also, you can’t run from your credit card balance. You’ll need to pay it off entirely before closing the card is even an option. It’s important to face your financial troubles instead of running from them.

Be Persistent to Get a Lower Rate on Your Credit Card

If you don’t get the answer you want on your first call to the card company, ask to speak to a supervisor. If that doesn’t work, hang up and call back later. You may have better luck with a different customer service representative.

Keep contacting the company until you are connected with a representative who is willing to work with you. While you shouldn’t call every day, there’s nothing wrong with a few phone calls spread out over a few days.

It’s also important to remember that every credit card company sets interest rates based on your credit history. If you’ve got a bad credit record, a phone call to customer support probably isn’t going to work. Instead, work on rebuilding your credit and improving your credit score. Then, call back in the future when you’re in a better position and have more leverage.

Where to Get Started

So where should you begin? With your highest credit card balance, the one with the highest interest rate or the oldest card?

Typically, it’s a good idea to start with your oldest credit card first. Loyalty is usually rewarded, as credit card companies want to please long-standing customers. Starting out the conversation talking about how long you’ve been with the company is a great bargaining tactic.

Remember, It can’t hurt to ask, right? It seems too simple, and that’s why so few people actually take the time to contact their credit card issuer to try and help their own finances.

Lastly, please remember to be polite. A customer service job is tough and you wouldn’t believe how some people talk to these individuals over the phone. In my opinion, kindness always wins.

2. Transfer Your Credit Card Balance

In some cases, it might not be possible to secure a lower interest rate by contacting the card company and negotiating. Maybe you haven’t been a great customer or they can’t extend any offers based on your past credit history.

If this happens, another option is to shift some of your credit card debt to another credit card with a lower rate through a balance transfer. You may even be able to get a deal with 0% interest for a promotional period of time. Typically, you’ll have six to 18 months to pay the loan off before your interest rate increases.

A 0% balance transfer deal is basically free money from your credit card provider. But there are several downsides to balance transfers. First of all, you will need to have a decent credit score to be approved for a balance transfer card.

Secondly, if you are approved and you transfer your balance, you’ll have to pay a balance transfer fee.

Finally, balance transfers can be a trap. Some people see that zero balance on their old card and get lured into running up balances on it again.

Others fail to come up with a plan to completely clear their balance on the new card before the intro period is over. They end up with an interest rate that’s higher than the one they were paying on their old card.

You may be able to transfer your debt to yet another balance transfer card, but opening another card hurts your credit score. More importantly, it’s a really bad habit. If you want to use a balance transfer card, think carefully about what got you into debt in the first place and change those habits before you go forward.

How to Find a Low Balance Transfer Rate

Like other loans or credit card opportunities, it’s important to shop around for the best deals. I have Chase, Citi, and Discover cards and they all have different balance transfer opportunities.

You can’t transfer balances to the same issuer as the card you want to transfer from. So, look for deals online from other companies. The deals can vary widely so make sure to evaluate:

Balance transfer fees

The typical balance transfer fee is 3% to 5%. For example, if you’re transferring a $10,000 balance with a 3% balance transfer fee, you’ll pay $300. And that $300 will be added onto the new card. You’ll pay $500 if you’ve got a 5% balance transfer fee.

These fees can add up if you’ve got a large balance. Be sure to do the math to make sure the interest you’ll pay on your old card is more than your balance transfer fee. Otherwise, you’re better off not transferring your balance.

Intro Period

How long do you have to pay the balance transfer off? Most promo periods range from six to 18 months. The longer you have, the easier it should be to pay off fully.

But note that after the intro period is over, your remaining balance is charged at a higher rate. Often, this rate is higher than the APR on your old card, so it’s important to have a plan to pay the balance off before the intro period ends.

3. Get a New Low-Interest Credit Card

While it’s ideal to pay off your credit card in full every month and avoid interest entirely, it’s not always possible for some people. Sometimes you may need to run a balance after making a large purchase for something like a home repair or a wedding. Or, despite having saved up money in an emergency fund, you may experience a one-off financial issue that your emergency fund can’t cover.

I won’t recommend a specific low-interest card because it depends on your own unique situation. If you think you’ll have to carry a balance for the short term, find a card with a 0% introductory rate and pay it off before the rate expires.

Or, if you think you’ll carry a balance beyond the 6–18 month intro period offered on a 0% card, try to find a card with a consistently low-interest rate.

If you have a good credit score you’ll probably have a handful of options, as almost every major bank has at least one 0% offer. These cards are also helpful if you have a ton of expenses like moving, having a baby or buying a house.

4. Get Help From a Credit Counseling Company

If you have a lot of credit card debt, a credit counselor could help you out as well. Credit counselors work directly with credit card companies and other creditors to help negotiate lower interest rates. This could be a good solution if you’re unable to negotiate a lower interest rate on your own or find the right balance transfer offer.

When you’re looking for a credit counseling agency, choose a reputable, nonprofit organization that’s a member of the Financial Counseling Association of America (FCAA) or the National Foundation for Credit Counseling (NFCC). These agencies are different from debt repair companies, which practice methods that can ruin your credit record. Besides negotiating your interest rates, nonprofit credit counselors can also you budget and teach you how to stay out of debt.

How to Keep Your Interest Rates Low

Hopefully, one of these strategies will help you get a lower interest rate on your credit card. Once you’ve secured a lower rate, don’t get comfortable and resort to any bad financial habits that might have gotten you there.

Your APR can change under three circumstances:

  • You’re 60 days late on your payment
  • Your credit score has dropped substantially
  • You’ve had the card for 12 months or more

Stay ahead of a rising APR in the future by following these steps:

Pay Your Balance Religiously

Always pay on time, preferably in full. If you pay your bill more than 60 days late, your credit card issuer can raise your interest rate and your credit score will take a hit. This is a big financial mistake.

If you do have a late payment and it gets resolved within a few days, I recommend contacting your credit card provider. Try to get the late fee removed. Most of the time, if it’s your first time paying late, the credit card company will forego a late fee if you ask. As always, remember to be persistent and friendly throughout the process.

Watch Your Credit Utilization Ratio

Your credit utilization ratio is what you owe divided by your available credit (your credit limits). FICO scores use this as one factor in determining your overall score, which can affect your interest rates.

Try to keep your card balance as low as possible, but definitely below 30% of your credit limit. For example, if your credit limit is $10,000 for a card, stay under $3,000.

FICO looks at not only your credit utilization ratio on each card, as well as your overall ratio. Say  you’ve maxed out one card but barely use your other cards. Your overall ratio may be low, but your credit score will still get suffer a bit because of that one maxed out card.

Maxing out your credit cards negatively impacts your credit score and increases your the interest rates you’ll pay on any new loans you take out in the future.

Consider a Personal Loan for Large Expenses

Personal loans often have lower interest rates than credit cards. You can get a personal loan from your bank or credit union. Credible and other similar services can also help you find personal loans with good rates. These sites let you search for loan providers and compare them to each other.

Always Check Your Credit Score

Use sites like Credit Karma to stay on top of your credit score. Many credit cards also now offer free credit scores.

Don’t wait to check your score once every few years. Stay ahead of any potential issues to keep your rates as low as possible.

Final Thoughts

As you can tell, there are few options when it comes to getting a lower interest rate on your credit card. The biggest thing to remember is that you can contact your credit card company at any time and ask for a lower rate.

Don’t get intimidated by the process. Have all your details ready beforehand and stick to the script.

If that doesn’t work, consider getting a low-interest balance transfer card or a new card with a low intro APR. Use these and the other credit tips to keep your rates low and credit scores high.

What is your experience asking for a lower interest rate on your credit card? Please let us know on our social media accounts.