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Can You Negotiate Interest Rates on Credit Cards? [Save Money!]

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Jessica Merritt
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Jessica Merritt

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A long-time points and miles student, Jessica is the former Personal Finance Managing Editor at U.S. News and World Report and is passionate about helping consumers fund their travels for as little ca...
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When it comes to credit card interest rates, you may think you’re at the mercy of the credit card companies — but you have more negotiating power than you think. Major credit card issuers such as American Express, Bank of America, Capital One, Chase, and Citi may lower your credit card interest if you ask for it.

We’ll discuss why it pays to negotiate your credit card’s interest rate and how to do it. You might not get a lower interest rate, but it’s always worth it to ask.

Everything Is Negotiable — Even Your Credit Card’s Interest Rate

Credit cards are useful tools for flexibility in payment options, rewards, and benefits. But if you carry a balance and pay interest, credit card debt can quickly get out of hand. 

It’s best to not pay credit card interest at all. But if you have to carry a balance, paying less interest is always better. 

Think you have to just deal with whatever interest rate a credit card issuer hands out? Think again. While you do have to work within the credit card offers available to you, you probably have more options than you realize.

Credit card companies know you can get another credit card and stop using any card that doesn’t meet your needs anymore, so they’ll generally want to play ball to keep your long-term business. The idea is to get a lower interest rate without switching cards.

Couple Tackling Credit Card Debt
Small interest changes can add up to big savings on credit card debt. Image Credit: Mikhail Nilov via Pexels

If you’re paying credit card interest, you should always consider how you can pay less. When you lower your credit card’s interest rate, you can save hundreds, even thousands, in credit card interest.

When To Carry a Balance on Credit Cards

Before we get into how you can lower your credit card interest, let’s talk about why you have to pay it in the first place. 

You’ll pay interest fees anytime you carry a balance on your credit card subject to interest charges. That doesn’t include any balance you carry while your card has a 0% introductory annual percentage rate (APR), though you’ll be charged interest on any balance remaining after the introductory period expires.

Hot Tip: It can make sense to carry a balance on a credit card when you have a 0% introductory rate, especially if you need to finance a large expense over time or transfer a balance from high-APR credit cards. But once you’re past the point of 0% APR, it’s time to figure out how to avoid paying interest or at least lower the amount you pay.

Credit card interest is especially problematic because you’ll pay interest on top of interest. Each month, interest charges are added to your unpaid credit card balance. Then the next month, you’ll pay interest on your full balance — not just on your original transactions, but on the interest fees added to your balance, too.

We don’t recommend accruing interest — ever — on rewards credit cards, as you’ll pay far more in interest than you’ll ever earn in rewards value. But if you find yourself needing to carry a balance on any card, it pays to ask for a lower rate.

How Much You Can Save With a Lower Credit Card APR

Let’s say your credit card has a 16% APR. If you’re like an average American household with about $8,600 in credit card debt, you’ll pay $781 per month and a whopping $636 in interest if you pay it off over 12 months — and that’s assuming you don’t add any more to your balance. 

Knock that APR down to 13%, and your monthly payment goes down to $769 and overall interest down to $516 — more than $100 in interest savings over the same 12-month period.

A lower interest rate can also help you manage credit card debt, as any reduction in interest rate means more available cash. You can use that cash for expenses or to pay down credit card debt faster.

When You Should Negotiate Your Credit Card Interest Rate

Any time is a good time to negotiate a lower rate on your credit cards, but there are some circumstances when you should prioritize asking for interest savings: 

  • You need to carry a balance. Any time you carry a credit card balance, you should first do everything you can to lower the rate. 
  • You’ve held a card for more than 6 months. Credit card issuers probably won’t entertain the idea of changing your APR if your card is brand new, but you have a better chance on established accounts.
  • Your credit score has increased. Better credit scores get better rates. If you’ve recently improved your credit score, let your issuer know so they can lower your APR accordingly.
  • Your financial situation has changed. If you’re going through financial difficulties such as unemployment, your credit card issuer may be able to offer you a break on interest to help you avoid default.

Let’s say you typically pay off your card in full each month, but a large expense comes up that you need to carry a balance on. While you’re still within the grace period for that charge, call to lower your credit card interest so you can reduce interest charges before they start.

Even if you don’t plan to carry a balance, it’s good practice to negotiate your credit card interest down in case of an emergency. It takes a little time out of your day but can provide you with some extra security if you unexpectedly need to carry a balance from one month to the next.

As you consider which cards to take the time to negotiate your rate on, start with your oldest credit card. This is a great place to start because you have the most loyalty with this card and the credit card issuer will be more motivated to keep your business long-term. The credit card issuer will be particularly keen to offer a good deal if you have a history of paying your bill on time.

This is also the card you’re most likely to hear a “yes” on, so it can drum up some good motivation for you to keep going and ask for more reductions on other cards. And on an aged account, it has probably been a while since you’ve checked in on your interest rate. No time like the present to save some cash!

You should also prioritize credit cards you hold a particularly large balance on, especially cards that charge a high APR. Lowering your interest on these credit cards will offer the greatest cost savings, so it’s absolutely worth the time investment to ask for a better rate.

Can You Lower the Interest Rate on a Credit Card?

Nothing is guaranteed, but your chances of a lower APR are pretty good — if you ask for it. 

You shouldn’t expect a credit card issuer to lower your credit card’s interest rate on its own. After all, they want to earn as much interest from you as they can. If you haven’t asked for a better deal, they’ll take your silence as acceptance.

While the APR on most credit cards will fluctuate based on market interest rates, credit card issuers don’t just hand out lower interest rates on merit without a request. But if you reach out, you might get a lower rate. 

At the end of the day, credit card companies want to keep your business. They generate revenue with every transaction, fee, and interest charge you pay. Plus, credit card companies know there’s an endless sea of alternatives should you choose to get a new credit card that better suits your needs.

For credit card companies, it’s worth taking a hit on interest charges to secure your continued business, which means potentially years of revenue from you in transactions and fees. You should expect the credit card company to offer something to keep you from moving on to one of the hundreds of other credit cards available to you.

Bottom Line: You might not get a blockbuster deal, but even an incremental improvement is a win that keeps more cash in your pocket. It never hurts to ask — make that call!

Who Can Get a Lower Credit Card Interest Rate?

While everyone has at least a small chance of negotiating a lower credit card interest rate, some cardholders are more likely to get better deals than others. If you’re a good customer but have poor credit, the credit card company may still work with you.

Here are a couple of factors the credit card company will consider in your request for a lower interest rate:

  • Credit Rating: Generally, the better your credit score, the better your interest rate will be. You can still ask for a lower rate even if your credit score is below average, but your offers won’t be as strong as cardholders with excellent credit.
  • Customer History: Your behavior as a cardholder influences your value — and how much a credit card issuer will work to keep your business. Credit card companies love cardholders who use their cards regularly.

How To Ask for a Lower Credit Card Interest Rate

Before you call to negotiate your credit card’s interest rate, do some homework:

  • Check Your Credit: Know your current credit score and look at your payment history for your card and other accounts. Confirm how long you’ve held the account. If you have great credit and a history of on-time payments, you’ll want to point that out.
  • Check Current Terms: Confirm your credit card’s current terms, including your APR, balance, due date, and grace period.
  • Research Other Offers: Look at credit card offers that come in the mail and check the CardMatch tool for your current offers. You’ll want to compare these offers to your current card terms.

Ready to negotiate? Call your credit card’s customer service line and get in touch with a representative. Plan for each call to take about 15 to 20 minutes. 

You’ll have to talk to an actual human, but for this task, that’s appropriate. While you could try a secure chat or email, negotiations are generally best handled the old-fashioned way over the phone.

Call center man woman headset
Pick up the phone and call your issuer to negotiate your credit card APR. Image Credit: vichie81 via Adobe Stock

Don’t be scared to talk to the credit card company about your interest rate. Even if you feel ashamed about carrying credit card debt, consider how valuable it could be to put your feelings aside and claim the interest savings. 

Credit card representatives talk to people about credit card debt all the time. While it might be personal to you, it’s just business — and customers carrying a balance are some of their most valuable.

Here’s how to make that call:

  • First, be kind. Credit card representatives often deal with rude or abusive customers, but that’s not a great way to negotiate. Be polite and professional and they’ll be more inclined to help you out.
  • Explain why you’re asking to reduce your interest rate. It could be as simple as letting the issuer know you’re shopping around for credit cards and have found a better rate than what they’re offering. You can give them a chance to meet or beat that rate so you’ll stick with your card and avoid moving your balance to another credit card company.
  • Discuss your goals for a lower interest rate. Maybe you’ve recently increased your credit score, or you’ve resolved to start paying off large balances and would like a little help. You might cite financial hardships, such as unemployment or sudden unexpected expenses, requiring you to carry a balance on that card.
  • Make your pitch. If you’re a great customer, remind the issuer of that fact. Point out how long you’ve held the account, how much you spend on your card annually, and mention your history of on-time payments.
  • Let the issuer make the first offer. You don’t have to cite a desired rate. In fact, it’s probably best if you let the credit card company suggest a number first — and it might be lower than what you had in mind. But if you’re not satisfied with the offer, you can suggest a lower rate.
  • Negotiate if the terms aren’t good. You might not get the rate you want. If that happens, you can ask for a temporarily lower rate or other benefits. For example, you could ask about bonus points on a rewards card or a waived annual fee.
  • Offer suggestions. If you’re asking for a break because of financial hardship, you might suggest a temporarily lower rate. For example, your credit card issuer could reduce your interest rate for a few months while you’re unemployed, or for a year while you catch up on medical bills.
  • Escalate. If you don’t feel satisfied with the offer or service you’re getting from the first person you talk to, you can ask to speak to a manager. Or, you could just call back and try your luck with a different representative.
  • Confirm. After you get a lower rate, ask to get a confirmation, and be sure to read the fine print. Also, check your next statement to confirm the change has been made and you’re actually charged a lower rate.

Hot Tip: If you’ve recently gotten a raise or picked up a side hustle, update your income profile under your account services. While credit card companies typically use this information for credit limit decisions, it doesn’t hurt to present a better overall customer profile when you ask about your interest rate.

How Often To Negotiate Your Credit Card Interest

Even if you didn’t get the rate you want, you can always try again later. If you can’t get a lower credit card interest rate now, ask again in about 6 months. You can also ask the credit card company what the time period is for reconsideration. 

And if you got the rate you wanted? It still makes sense to negotiate again. Give it another 6 months or a year if you really don’t want to deal with the hassle.

In the meantime, be sure to make on-time payments. And hang on to any credit card offers you get from other issuers, as you can cite these offers when you call to negotiate again.

Your credit rating may change, you could increase your income, or you might just get a better customer service agent on the phone next time.

What Is a Good Interest Rate on a Credit Card?

You’ve asked and gotten a lower rate, but is the offer any good? Compare your offer to the average credit card interest rate for your card type and credit rating. 

Most credit cards hover around 20% interest, but you could do better (or worse) than that depending on how good your credit is and the type of card you carry. For example, if you have great credit, your interest rate on a cash-back credit card could be around 13%.

Bottom Line: You should accept any reductions you can get in interest rate, even if it’s not as low as you’d hoped it might be. You can always try again later to lower it further or take your business elsewhere.

What To Do if You Can’t Lower Your Credit Card Interest Rate

If you don’t get a lower rate or you’re not satisfied with the rate you got, ask for an explanation of the decision so you can have more details. That might help you when you follow up with a future request. 

For example, if the issuer says you don’t have enough recent transaction activity, you could use your card more before you try again.

But if you don’t think you want to keep using the card, you have other options:

  • Use a different card if you need to carry a balance.
  • Transfer your balance to a 0% card.
  • Consider a debt consolidation loan for debt you can’t pay off within a 0% introductory period.
  • Improve your customer profile, then ask again. You can increase your credit score, pay down debt, and make on-time payments.

One thing you shouldn’t do if you can’t lower your credit card’s interest rate: close your account

While it might feel satisfying to walk away from a credit card issuer that said “no” to your request, you’ll probably hurt your credit rating by removing the card from your credit history — along with your available credit. Sure, you can stop using it, but keep that account open.

If you feel the credit card isn’t a good fit anymore, and it has an annual fee, you can always ask to downgrade for some cost savings but still keep the account open. 

For example, you could get a new balance transfer card, then call to request that the issuer move your account to a card with no annual fee. That way, you could hold the card indefinitely and not worry about additional costs.

Other Ways To Lower Credit Card Interest Rates

Aside from negotiating your credit card interest rate, there are other ways to save on credit card interest:

  • Shop for a new credit card with a lower APR.
  • Focus on paying down your credit card debt. The lower your balance, the less interest you’ll pay.
  • Get a debt consolidation loan to stop revolving debt.
  • Don’t carry a balance. It might be easier said than done, but if you’re playing the points game and carrying a balance, you’ve already lost because you’ll pay way more in interest than you can earn in rewards.

Final Thoughts

Negotiating a lower credit card interest rate is always worth the effort. While the best option is to pay no credit card interest, getting a lower rate on any credit card balance you carry could offer savings for years to come.

Frequently Asked Questions

How can I avoid high interest rates on credit cards?

If you pay your balance in full each month, you don’t have to pay interest. Otherwise, holding a good credit score is your best defense against high credit card interest rates. But you can always call your credit card issuer to ask for a lower rate.

What is the best time to pay credit card to avoid interest?

You’ll always avoid credit card interest if you pay off your balance in full each month by the statement due date. Alternatively, you can transfer your balance to a 0% credit card and make monthly payments before the introductory rate expires.

How do I get out of a high interest rate credit card?

To get out of a high interest rate credit card, you need to pay off the balance. You can pay it off either with payments or by using a credit card balance transfer to move the balance to a card with 0% APR.

Will credit card companies lower your interest rate if you ask?

Your credit card issuer might lower your interest rate if you ask. It depends on the issuer, your customer profile, credit rating, and other factors whether you’ll get a “yes.” But the answer is always “no” if you don’t ask, so it’s worth checking!

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About Jessica Merritt

A long-time points and miles student, Jessica is the former Personal Finance Managing Editor at U.S. News and World Report and is passionate about helping consumers fund their travels for as little cash as possible.

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