(Article updated September 2018)

If you own a credit card, you’re aware of the high interest rate that you get charged if you forget to pay your bill on time. You may have wondered a dozen times, “Will my credit card company lower the interest rate they charge on my debt? If so, how can I get it lowered to make the debt more affordable and easier to pay back?” The good news is that you can negotiate with credit card companies using different reasons as a basis for a lower interest rate, which will eventually allow you to make smaller payments as you repay your debt.

Why is my credit card interest rate high?

The interest rate on your credit card is usually stated on an annual basis and is also known as the Annual Percentage Rate or the APR. The reason many credit cards charge a high APR is because the debt is short-term consumer debt, as opposed to long-term debt like home loans or student loans. Generally speaking, interest rates are lower for long-term debt and higher for short-term debt. When it comes to credit cards, the interest rate is even higher if you have a low credit score or a cash-back feature on your credit, and the APR can go as high as 20%. All this can make it difficult to get rid of credit card debt because it multiplies very quickly. Fortunately, you can ask your credit card company for a lower/reduced interest rate using different techniques.

There are several ways to negotiate your credit card APR (click here for a script you can follow to ask for a lower interest rate) and this should help you repay your debt faster. The effectiveness of these negotiation techniques depends on a few factors such as your current interest rate, your credit score, credit history and loyalty as a customer. Read below to see which one applies to you.

1. Simply ask your bank to lower your credit card APR/interest rate

Credit card companies often agree to reduce interest rates if you simply ask them to lower your APR. Many consumers are unaware that a quick request will get them a discount so it does not occur to them to try to ask for one. Similarly, credit card consumers can call up the company and request them to cancel late payment fees on their bills. However, if your account manager is reluctant to oblige with your request for a lower APR, you can use a few negotiation tactics to reduce your interest rate, which we discuss below.

2. Get a lower credit card interest rate by stating that a reduction will prevent you from defaulting on your debt

When you negotiate with a credit card company, or anyone else for that matter, you create an incentive for them to concede to your requirement. Similarly, this negotiation technique creates an incentive for the company to lower your credit card interest rate and overall bill.

It is true that credit card companies make most of their money off consumers who do not repay their credit card bills on time. These companies generate revenue through the interest charged on outstanding credit card dues and the longer it takes for consumers to clear the credit card bill, the more money credit card companies make. However, they also do not want consumers to completely default on their payments because they will have to write off the debt as non-recoverable, and that means they lose money. In other words, credit card companies need debtors to repay their loans, just not on time.

According to the Federal Reserve, default on loans are an ongoing risk for commercial banks, and as a consumer with credit card debt, you can use this default-prone feature of the business model to bargain your way to a lower credit card interest rate.

If you feel your credit card has a high interest rate, you may call up your account manager (or the bank’s helpline) and politely ask them to lower your credit card APR by a few percentage points in order to prevent you from defaulting on all your payments. Start your negotiation by first sharing your willingness to repay the debt and then mention that you are likely to default on the current credit card bill (as well as those in the future) because the interest rate is too high.

This way, you indicate there is a possibility the credit card company will continue to recover their money and generate revenues from you as a client and that creates an incentive for them to lower your credit card interest rate.

What to say

Here is a negotiation script for this tip.
‘I intend to clear my credit card bill, as I have in the past, but I’m heading towards financial trouble and I’m afraid it will not be possible for me to make any more payments unless the credit card APR/interest rate is lowered.’

You need not jump right to your demand for a lower interest rate and may want to wait for the bank staff to offer it herself/himself, depending on the situation.

When will this tip work?

The effectiveness of this credit card negotiation technique depends on your past bill payment pattern and your ability to convey the real chance of default on your future payments.

3. Use your loyalty to the bank to negotiate a lower credit card interest rate/APR

In this day and age of hyper-competitiveness in the for-profit sector, almost every company is vying for a larger market share to deliver greater revenues and, ultimately, greater profits to investors. Loyalty programs have become prevalent these days to reward customers who keep coming back and credit card companies are very competitive in this regard.

If you are the type of consumer who does not constantly move between credit card companies, this negotiation tip may help you secure a lower interest rate on your card. Many people own multiple credit cards but the key here is to regularly use them all instead of canceling the old ones, to build brownie points that you can use to bargain a lower credit card APR. You will essentially leverage your loyalty to the bank or credit card company to get a lower interest rate as a reward for your commitment to the brand. A lower interest rate will lower your outstanding debt and make it easier to pay your credit card bill.

To use this negotiation technique, call up the credit card company or visit the office, and mention that you have been with them for many years and would like to know if any incentives are available for loyal customers, such as yourself. Financial companies regularly reward their best customers through credit card points, cashback incentives, and even APR cuts on the credit card. Tell the account manager that you would appreciate it if you were rewarded with a cut in your credit card’s interest rate and add that it would help you out in many ways while giving you an incentive to stay loyal to the credit card brand.

What to say

Here is a negotiation pitch for getting your credit card APR lowered using this specific method:
‘I am calling to ask about your loyalty programs and rewards you offer to customers that have been with you through the years. I have been using the XYZ credit card for 5 years (or however long you have had the card for) and am really happy with how you treat your customers. Is there a possibility of getting the interest rate on my credit card lowered?’

When will this work?

This negotiation tip will only get you a lower credit card interest rate if you have been using the card for a few years to establish your brand loyalty to the credit card company. If that does not apply to you, there are other ways to get the APR lowered on your card.

4. Leverage your good track record as a customer to cut your credit card interest rate

Let’s say you have not been using your credit card long enough to be considered brand loyal by the credit card company to be in a position to use the last negotiation pitch. However, if you have been using your credit card responsibly, which means you have regularly repaid your debt on time, you can highlight your good financial behavior as a bargaining technique to get the credit card interest rate reduced.

In this negotiation method, emphasis is placed on your ability to use your credit card responsibly. Ask your account manager to consider your credit history, which will show that you have:

  • Always been prompt with credit card payments,
  • Stayed well within the spending limit authorized for the particular credit card,
  • A good credit score.
  • Used the credit card frequently to make purchases yet managed to avoid accruing credit card debt beyond the due date.

Add any other consistent behavior that proves you are in full control of your financial life, and that you would, as a reward, want a concession on the interest rate that the company charges you. Do not forget to mention any high-value transaction that you carried out using your credit card, the bill for which, you quickly repaid later. This could include home appliances or a vacation you went on. You will use all this information to highlight that you make the credit card bill payment a priority in your budget because you are a good, responsible customer.

Perhaps, your clean streak is followed by a few episodes of late payment on your credit card. You can let the company know the reason – maybe an unexpected medical bill came your way because of which you are currently struggling to make the payments on time. Explain your unique circumstances in light of your overall good credit card usage and request some leniency in the form of a lower interest rate on your outstanding credit card debt.

What to say?

Here is a negotiation script for lowering your credit card based on this tip:
‘I have been with XYZ company for a full year now and have always made my credit card payments on time. It has been a privilege to regularly use your card. It was especially useful when I went on vacation last summer and I made sure I paid off the credit card dues as soon as I returned. I have been a responsible client and do my best to set aside money to pay off my credit card bill each month. I was hoping you could, perhaps, lower the interest rate you charge on my credit card so I can continue to conveniently use it.’

When will this work?

The credit card company is likely to appreciate your ‘consumer ethic’ as well as clean credit history and reward you for making your credit card bills a priority every month. As with any other tip, it is possible this tip will not work if the manager feels they have given you enough concessions through different perks and features of the credit card. You can move on to the next tip, of that happens.

Be sure to check out this resource on using your credit cards responsibly by the Federal Trade Commission (website is run by the American government).

5. Use market research to get a more competitive (lower) interest rate on your credit card

As mentioned earlier in this blog post, credit card companies are always competing for customers by either retaining their current customers through loyalty programs or by attracting new customers. Numerous perks are offered on credit cards these days, such as reward points, cashback programs, flier miles, etc., all in a bid to get more customers to sign up or stay with the brand. Interest rates also vary on credit cards for several reasons, such as the cost structure of the company, risk profile of the credit card user and even the market interest rate (also known as the inter-bank lending rate). This is where you come in with a bit of market research about competing credit cards that advertise lower interest rates.

You can bargain a reduction in the interest rate if you tell your company that many other credit cards charge a lower interest rate and you too would like to be charged less in order to find your deal/package more attractive.

You can call up the helplines of various credit card companies and inquire about the interest rates offered along with other perks, or simply check their websites to carry out your research. When you call up your credit card company, do mention that you would like to continue your relationship with them but would like a better deal in which they either match another credit card’s interest rate or make it lower.

What to say

You can use the following negotiation script for this tactic:
‘I have been with your brand for XYZ months/years and I enjoy my relationship with you, however, I have recently been approached by other credit card companies that offer a lower interest rate on their cards, which seems like a really good offer to me. I would like to continue my relationship with you but I need a better deal to make this credit card more viable in the long run.’

When will this work?

This negotiation tip will only get you a lower interest rate if there are other credit card companies in the market that have significantly lower interest rates. It is also possible that despite the higher interest rate, your credit card company refuses to reduce it because they feel that other features of the credit card, like a high cashback rate or long grace period, make the credit card an attractive product.

6. Make 6 credit card payments on time to get your old, lower interest rate back

Sometimes the credit card company will increase your interest rate of you have been consistently late on your bill’s due date. According to Consumer Finance Protection Bureau (run by the American government), your interest rate on the existing balance can be increased by the credit card company if:

Your minimum payment has not been received within 60 days after the due date. The card company must give you notice of a rate increase 45-days in advance. Source; Consumer Finance Protection Bureau.

The good news is that the credit card company has to notify you of the interest rate hike, so you will be prepared for the higher cost of debt and you can make arrangements to lower it again. The next step is to make the following six credit card payments on time so the credit card company can review your case and lower your APR to the previous rate.

These 6 payments must be one after the other, which means they should be made consecutively after the new, higher interest rate has come into effect (i.e. after the 45 day notification period). Another leniency is that you need not pay the bill in full but can get your lower interest rate reinstated if you meet the minimum payments.

7. Switch to a zero rate balance transfer card and stop paying interest on your credit card debt for a few months

If the above tips fail to work or do not deliver substantial benefit in terms of a lower interest rate, credit card consumers can simply move their debt to a ‘balance transfer credit card’ which typically charges no interest fee (or a minimal APR). You can easily avoid paying interest on your outstanding credit card debt this way but the catch is that the ‘low or no interest rate’ feature is only valid for a limited promotional period and the subsequent rate may be higher than the one you originally paid on your previous credit card.

This means you should aim to repay your entire credit card debt on the balance transfer card before the promotional period ends to avoid paying higher interest charges. It goes without saying that you should look for a balance transfer card that gives you a long enough introductory period to pay off your entire debt.

Another thing to look out for is the balance transfer fee, which should be very low or non-existent to make the card a viable option. Many balance transfer cards have a credit limit, which is the maximum amount of debt you are allowed to carry on that card – this, of course, must be higher than the sum of money/debt you plan to transfer to the new credit card.

The reason this is not the first choice for getting a lower interest rate is because moving debt to a zero rate balance transfer card will negatively impact your credit score. In fact, many balance transfer cards have a credit score threshold that must be met to qualify for the credit card, which explains why it is not possible to keep moving your credit card debt to new balance transfer cards each time the promotional period expires, in a bid to continuously avoid paying interest charges.

If the balance transfer card leads to a fall in your credit score, there are many ways to improve it. Read through the various pros and cons of balance transfer cards to decide whether it is the right choice for you.

Credit Card Scams That Promise a Lower Interest Rate

You will find many credit card interest rate reduction scams these days so if you want to get a lower interest rate, it is better to handle it yourself by calling your credit card company’s helpline or visiting their office. Anything these scams offer to achieve on your behalf, you can do yourself for free. If you receive a call from someone claiming to work for a bank or an independent agency that promises to lower your credit card interest rate, be on your guard.

These companies ask you to share personal identification and financial information, which spells trouble. Sometimes the call starts off with an automated voice machine, and that is a warning sign because banks and credit card companies always contact you through a salesperson – when in doubt, hang up and call the official helpline of the bank or credit card agency to make sure you are talking to the right person.

If you are concerned you have been approached by scammers, be sure to report it to the Federal Trade Commission.

This brings us to the end of our negotiation tactics for a lower credit card APR. The effectiveness of each one of these tips depends on many factors so if one technique fails to work, move to the next, or simply combine them all to improve your chances of getting a bargain on the interest rate. Do not be afraid to call the company again if they refuse to reduce your APR – persistence is key.