How to Reduce Your Credit Card Interest Rate

The other day I decided to do something that I’ve been meaning to do for a long time. I wanted to take a larger look at my remaining credit cards and list out the annual percentage rates, balances remaining, and a plan to reduce any higher interest rates on those remaining cards.

What I found is that many of the credit card companies tend to stick to the same script. The representative will let you know that they don’t have the ability to lower the APR of your card for various reasons, most of the time stating that the company as a whole decided to turn down all requests to lower the APR.

However, if you’re pleasant and professional, you will find that you do not need to take no for an answer. If you press and ask more questions, you’ll find that sometimes the representative might be willing to assist further, especially if you mention that there are cards with lower interest rates or 0% interest rates for 15 to 21 months for balance transfers. This will almost always get their attention, because let’s face it, in the end they really don’t want to lose a customer over a few percentage points.

I kept a spreadsheet handy and noted all of the information that I could get from the representatives of these companies. Some I didn’t call only because I felt that their APR was more than fair and was already lower than what I’ve seen comparing with other credit cards.

I started with contacting the companies with the highest APR rates for their credit cards to see what type of arrangements I could make. While it does take some time, I highly recommend doing this just to see if you might be able to save some money and make paying off these debts a little easier. You may even want to ask if they have temporary rate reductions if they are unwilling to lower an interest rate on a permanent basis.

Of course, most credit card companies use the prime rate and add to that their percentage rate to get the total APR. The percentage that they add is the percentage that they may be willing to negotiate if they want to continue to keep your business. Even if you are planning on eventually closing the account, you may as well check to see if you can get a lower interest rate in the meantime while you work to pay off the balance.

Be sure to mention the positives that help with your request when you talk to a representative, such as mentioning consistent on-time payments. They can see the information in front of them, but highlighting the positive wouldn’t hurt your case.

On your end, be sure to not only make payments on time but also lower your balances consistently. Be careful not to go above the credit limit on your credit cards. Doing this consistently will work in your favor as well when it comes time for you to ask for a rate reduction.

I’d also advise to revisit asking for rate reductions every six months while you’re paying down your credit cards, especially if you’ve been turned down initially. Many people tend to look at credit card interest rates as being etched in stone, but with the right persuasion and conversation, you may find that you will be able to pay a lower interest rate than what you’re getting right now. It’s worth the time to find out, and it rarely hurts to ask.