How to Negotiate a Lower Credit Card Interest Rate

Zivica Kerkez /

Editor's Note: This story originally appeared on Living on the Cheap.

Trying to pay down debt? One thing holding you back is likely the interest you pay on your credit cards.

The high rate of interest means that a large portion of your payment goes straight into someone else’s pocket, rather than going toward debt reduction.

If you want to speed up the debt repayment process and save money while you’re at it, reducing your credit card interest rate is a good place to start. The good news is that you might be able to lower your rate just by asking.

Setting the stage

In some cases, credit card representatives are authorized to lower your interest rate if you simply ask — so long as your account is in good standing.

This isn’t always the case, though, and if you want a bigger reduction, you will need to speak to someone with a little more clout.

An account in good standing is your best argument when you call and ask for an interest rate reduction, no matter whom you talk to. Before you call, review your account information.

Have most of your payments in the past three years been on time, and amounted to at least the minimum? If you’ve been late with one or two payments, you might not be affected, but you will be less likely to get what you want if you habitually miss payments, or pay late.

You should also check your credit report and score. If you have good credit — especially if it has improved since the interest rate on your card was set — you can make the argument that your credit warrants a lower score.

Most credit card issuers won’t automatically lower your rate as your credit improves. It’s up to you to draw attention to your improving financial reputation and ask for a rate that better reflects your good credit.

Finally, have an idea of your desired outcome, as well as a clear idea of what you can realistically do if you don’t get what you want. If you want your interest rate reduced from 17.99% to 10.99%, are you willing to accept a smaller reduction?

What if you are offered a rate of 13.99%? Would that be acceptable? You might not get exactly what you ask for, but it might be worth it to get any reduction at all.

You should also be prepared for what happens if you are denied. The best leverage is to be able to say that you will close your account and pay off the balance.

This threat is most effective if you have the means to pay off the entire balance immediately. If you can’t pay off the balance immediately, or perform a balance transfer to another card, don’t make this threat.

Sample script for negotiating a lower rate

Now that you have gathered information and prepared for your phone call, it’s time to see if you can get a better credit card interest rate.

Before you call, make sure you are calm. It’s vital that you remain polite throughout the conversation, even if you don’t get what you want.

Consider practicing a couple of times before you actually make the call so that you are prepared and more likely to calmly state your case.

Get a paper and a pen, call the customer service number on the back of your credit card, and use a version of the following script:

YOU: Hi, my name is ________. I’ve been a customer for _________ years, and my account is in good standing. I like being a customer, and like my credit card. However, I feel that my APR is too high, considering my relationship with (name of issuer) and my credit situation. Are you someone who can help me lower my interest rate?

(At this point, the representative will either offer to lower your rate or refer you to a supervisor. If you want a greater reduction, politely ask to speak to someone else. When the supervisor greets you, you can continue.)

YOU: My name is _______, and I’m a longtime customer. I’m interested in lowering my interest rate. May I ask your name and extension?

(Supervisor should provide you with this information; write it down.)

YOU: Thank you. I feel my APR should be lowered due to my long-standing relationship with (name of issuer) and my improved credit situation. My preference is a rate closer to ______.

(At this point, the supervisor will let you know whether that is doable. The supervisor might put you on hold to check with available rates, and come back with a counteroffer. You should know what you are willing to accept ahead of time, so you can move forward. If you agree on a rate, make a note of it on your paper, along with the date.)

YOU: Thank you for working with me on this. I appreciate it. When can I expect this rate to take effect, and when should I look for written confirmation via mail?

– OR –

YOU: I wish that we could come to an agreement, since I’ve enjoyed being a customer. However, if you really can’t give me a better APR, I would like to pay off (or transfer) my balance and close my account.

(The supervisor might suddenly find that a better rate is available after all, or may agree to close your account. Ask for written confirmation of the cancellation, politely say goodbye, and move forward with your arrangements to close the account.)

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