Ways to Negotiate a Better Credit Card Interest Rate

Ways to Negotiate a Better Credit Card Interest Rate

Time To Read 3 MIN READ

Instead of cursing your credit card company for its high interest rates, do something about it – call and ask for a lower rate. It's probable that you'll successfully negotiate one. Here are a few tips on how to do it.


Is It Worth It?

You hate confrontation. The idea of a 15-minute chat with your credit card company is not ideal. So you have to ask yourself: Is it worth it?

See for yourself what a rate reduction from 18 to 13 percent will do for you. Assume that your balance is $5,000 and you are paying it off by submitting the minimum payment each month. At 18 percent, you'll pay more than $2,900 in interest alone. At 13 percent, this drops to $1,800 – that’s $1,100 less. This means that lowering your credit card interest rate really is worth it, and it's not as hard as you might think.


Is It Possible?

Gerald Chu, a Visa card specialist with Bank of America in the San Francisco Bay Area, admits that lenders want to accommodate customers with good credit. "We prefer to lower the rates and keep the customers," Chu says, "but for those with good credit only." You aren't likely to succeed in getting a better rate if you have late or skipped payments. 

Plenty of people do talk down their rate, however. In a national survey conducted by the U.S. Public Interest Research Group, 50 customers called their card companies and asked them to lower their interest rates. Although their credit scores were all over the map, over half talked their way into lower rates, dropping them from an average of 16 percent to about 10.47 percent.


How to Do It?

Don't kid yourself – a Visa representative is not going to call and ask if you'd prefer a lower rate, no matter how good your credit is. You'll have to gather your courage and ask.

Prepare for the call by reviewing your account and determining how long you've been a customer and your current interest rate. Then find out what other credit cards are offering in terms of rates. Ask to speak with a supervisor when you call because agents rarely have the authority to lower rates. Remember to remain polite and be patient.


What to Say?

Start by introducing yourself and stating the reason for your call. Say something like: "Hi, my name is Jan Jones and I've had a credit card with you for 10 years. I've been a good customer and I've paid my bills on time, and I am generally very happy with the card. But the APR seems high to me and I'd like to talk about getting a lower rate." As the conversation progresses, mention other credit card offers you've received from their competitors, and the rates those companies offer their good customers. Don't exaggerate. Credit card professionals know what rates are out there.

If you get the rate you want, ask for confirmation in writing and then bring out the champagne. If not, try again when your balance is lower or your credit is better.

Key Concepts

  • Negotiating credit cards
  • Credit card interest
  • Lower credit rate