An increased credit card interest rate (or APR) means more of your payments go toward paying interest and less toward eliminating debt, but by simply asking you may get a reduced APR rate.
Credit card issuers may be more willing to negotiate if you’re an established customer who consistently pays on time; don’t give up if they say no!
1. Do Your Research
Preparedness increases your odds of receiving what you ask for from your credit card issuer. Before calling them up, do some research into your credit score and interest rate as well as finding better rates elsewhere. Ordering a free copy of your credit report allows you to view important details such as payment history and debt-to-income ratio. If your current lender offers lower rates than others this could bolster your argument for getting one reduced as well.
When calling your credit card company, be polite and explain why you wish for a lower interest rate. Begin by explaining that you have been with the company for an extended period, that you’ve always paid your bills on time, and that similar cards being advertised with lower rates make yours seem out of step with industry norms.
Written notes that support your case can be extremely helpful when speaking to credit providers. By outlining any competitive credit cards you’ve found and their terms, as well as showing your loyalty by noting how long or frequently you use the card in question, they should have a better idea of your circumstances and credit profile.
On your call with creditors, be sure to highlight any positive aspects of your financial profile that could help sway their decision in your favor. Working hard on improving your credit score could be enough of an argument for them to give you a lower rate; also mention any hardship programs offered by card issuers as another factor which might strengthen your case.
Subtracting just a few percentage points off of your credit card interest rate could save you hundreds of dollars within one year or even years later, depending on your circumstances. Just keep in mind that any savings from lower rates should go toward paying down principal owed.
2. Call the Customer Service Number
Call your card issuer’s customer service number in order to submit your request and hopefully lower your interest rate. Depending on their tiered structure, some credit cards may require meeting certain criteria before they grant your request.
When calling to discuss your interest rate, it’s best to be polite. Credit card representatives deal with angry customers daily; by remaining calm and professional on the line, your company may be more accommodating of your requests.
Before entering into negotiations for your credit card’s interest rate, make sure you know its current rate and have details about any competitive offers to support your claim that a lower interest rate would benefit you. Be prepared to explain your financial circumstances including unemployment or unexpected expenses which have made paying your balance each month difficult for you.
if the initial customer service representative declines your request, request to speak with their supervisor instead – this individual likely possesses greater authority and incentive to grant your request.
Credit card companies rely on balance-carrying customers to generate profits, so lowering your credit card interest rate as one way of showing that you’re an important customer is one way you can show how valuable you are to them.
Dependent upon your individual circumstances, reducing your credit card interest rate could save you thousands in interest over time. Use that savings to pay down balances faster or move them onto another 0% credit card where possible.
Even if your first attempt at lowering your credit card interest rate fails, don’t give up. Continue negotiating with your card issuer and looking at ways to lower it such as switching to a 0% card or seeking debt consolidation loans – ultimately it is worth making the effort in order to put more of your money towards paying down debt rather than into profits of companies.
3. Make Your Request
Credit card interest rates don’t have to be set in stone, and many responsible cardholders can find a more favorable interest rate simply by making a phone call. For best results, conduct research beforehand by ordering your free annual credit report and taking note of offers with more attractive terms or any hardship such as unemployment, medical bills or any financial issues which might require lower rates.
When reaching out to the card issuer, politely explain your desire for a lower interest rate and share details from your research. Also mention how long-standing the relationship is and that on-time payments have always been met in full by you and if necessary be willing to switch providers if needed.
Ask to be connected to another representative; being patient as you wait may yield greater success when dealing with long-standing card issuers.
As part of your conversation, emphasize your goal of making progress on debt faster by securing a lower rate loan. If other options for lowering rates exist, include these and ask if they will match any terms offered from competing providers.
If your request for a lower interest rate is denied by your credit card company, another approach could be asking them for a temporary reduction. This tactic has proven particularly successful among those dealing with credit card debt issues as a means to lower their balances while increasing credit scores.
If you’ve tried negotiating lower credit card interest rates but are still having difficulty repaying your debts, consider enrolling in a debt management program offered by nonprofit credit counseling agencies. Such plans allow for consolidation of payments with reduced rates into one manageable monthly installment with lower interest charges.
4. Don’t Give Up
Don’t give up when your first request for a lower credit card interest rate is denied; every credit card company sets standards for reducing rates based on customers’ credit histories, so don’t assume you won’t be able to persuade a representative of changing those standards in your favor. Give it six months if that fails or explore other options like using a 0% balance transfer card instead.
When making your request over the phone, do it politely but assertively. Discuss how long you’ve been a customer, your payment history and your justification for needing a lower credit card interest rate. Include any competing offers you’ve come across during research that support your argument – be sure only to include offers relevant to your credit score!
If you can secure a lower credit card interest rate, resist the urge to spend more with your new card or transfer an outstanding debt balance to it. Instead, use the money saved from paying less in interest on existing balances to reduce them or pay down any outstanding debt completely.
Though you cannot always rely on credit card issuers agreeing to lower interest rates, a recent WalletHub study revealed that 77% of those who asked their cards for changes had their requests granted. By following these tips, you can increase your chances of success and reduce future credit card bills by up to 40%. While not ideal, one alternative would be paying off balances with other solutions such as personal loans or debt management programs for those without stellar credit scores. Prior to asking their credit card issuer to reduce interest rates, those with poor credit should work on improving their scores and showing evidence of responsible card usage are essential components. A higher credit score will make a stronger case when asking them to lower rates.