How to negotiate a lower credit card interest rate

Opening my mouth usually gets me into trouble. It’s a mystery how the space between one’s nose and chin can cause so much chaos, but it can. If you’re human, then it’s possible you’ve wreaked a little havoc by smacking your gums around too. Kudos.

Now, there are indeed times when it’s better to remain silent (and be thought a fool) than to open your mouth and remove all doubt. But this is not one of those times. When it comes to paying high interest rates on your credit card(s), only the fools keep their gobs smacked shut.

negotiate credit cards

If you’re constantly carrying a balance, you really must call your credit card company, open your mouth, and ask for a lower interest rate. Yeah, I’m saying you should negotiate down your APR.

Asking for a lower rate is free. And since most credit cards charge anywhere from 0% to 25% in interest (gobsmacking!), making a simple five minute phone call could save you hundreds, even thousands of bucks in interest charges.

See 5 Ways To Screw Your Credit Card Company for more legal ways to beat the debt game.

Five Steps: How to negotiate with credit card companies

Here’s how to do it:

Step One: Get your wallet

Grab the card you’ve had for a while — your oldest piece of plastic shows you’re a long time customer with an established credit history. Also, you’re more likely to win the war on rates if you’ve never been late with payments.

If you’re late to the payment party every month, I still want you to make the call. But don’t be too disappointed if someone says, No. A big meany ‘No’ doesn’t mean never, or forever impossible. It just means you need to do your best to make at least the minimum payments for several months for future negotiating success.

Step Two: Dial

Call the customer service number located on the flip side of your card. You can do this, so don’t flip out.

Step Three: Speak the script

Take this sample script for a spin. Don’t get tongue-tied or feel silly about reading someone else’s words — customer service agents read from scripts all the dang time. Today is payback, baby!

You: Hello, my name is [], here’s my account [] number.

Clickity clank typing.

Credit Card Agent: How can I help you?

You: I’ve been a good customer over the years. I just got an offer for a new credit card with a rate of 6%. I’d like to stay with you, but I’m paying 19% on my balance. Since I’ve consistently paid the minimum balance I’d like you to lower the interest rate on my credit card.

More clickity clank typing. Yeah, the agent is looking over your payment history. Stay strong.

Credit Card Agent: I’m sorry. This is the best we can do with this rewards credit card. You’re getting our best rate.

You: Please put me through to your supervisor.

Enter annoying elevator music. La, la, blah, blah.

Supervisor: How can I help you?

Repeat the previous script. Be polite. You may not get your uber-low ask, but you could score a rate far lower than your previous number. It’s likely the supervisor will counter with a better rate. If so, take it.

Step Four: Don’t give up

You can’t always get what you want. The Rolling Stones knew this. So if you don’t succeed at first, go ahead and try again. Call back in a few days and hopefully you’ll get a new customer service agent and supervisor to play with. Still no satisfaction? Call back in a month. Keep a record of your calls, and don’t give up.

Step Five: Pay that sucker off

Phone your other creditors and continue to ask for lower rates on all your credit cards. Make the most of this rate relief period by paying off your plastic in full. Keeping up with the minimum balance is nice, but you’ll prolong the paying pain for years, maybe even decades, while forking over piles of cash to your lenders.

Don’t believe me? Try my Credit Card Calculator to see your total interest paid based on your balance and minimum payments. Results WILL SHOCK YOU! Sorry.

Does asking for a lower rate really work?

Yeppers. A national survey conducted by the U.S. Public Interest Research Group (U.S. PIRG) found that a whopping 56% of consumers who called and asked their credit issuers for a lower rate, succeeded. Those who were successful reduced their APRs by around one-third, from an average of 16% to an average of 10.47%. Not too shabby for a five-minute phone call.

Canadian results are similar. In an unscientific experiment, the CBC asked ten mall shoppers to negotiate with their lenders. Six were promised a lower rate by citing a simple script. One shopper cut his rate in half, from 18% to 9%, just by making the call.

Improve your chances

Based on survey numbers, around half of you guys will succeed on the first negotiation call. Here’s how to increase your shot at a credit card rate decrease:

  • End your script statements with strength. Don’t ask, “Can you reduce my rate?” Say, “Please reduce my rate.” If you give the agent a little wiggle room, he will take the out and wiggle away. Squirmy suckers.
  • Negotiate on older cards. Established customers with credit histories are worth keeping, so creditors are far more likely to respond to rate reduction requests.
  • Don’t be close to the max. Ask for a better rate before you’re maxed out or close the limit. Running out of credit room is a red flag for creditors.
  • Pay your balance on time. Late payers and those paying less than the minimum balance should work to improve their payment history. Credit card companies are far more likely to give you a rate cut if you’re a proven payer. TIP: Try this nutty trick if you have sticky spending fingers: Curb credit card spending with a jar of peanut butter.
  • Be polite. Asking for a better deal is free. But being an a$$hole during the call could cost you. Nice people don’t always finish last, so be strong yet courteous during your call.

Now stop surfing the interwebs and start dialing your phone lines. Moving your molars for a few minutes could save you thousands — you just need to smile and ask.

Your two cents:

  1. SavingMentor October 24th, 2011

    This is SO true!

    I haven’t personally had to resort to calling the credit card company to lower interest rates because I pay off my balance every month and always plan to.

    However, if I did ever carry a balance on my credit card you better believe I would be riding the credit card company day and night to give me a lower interest rate. I’d be all over balance transfer promotions and anything else I could do to lower my rates!

    In reality, I’d probably just use my HELOC to pay of the credit card instead – but we’re talking worse case scenario here!

  2. CHERIE October 25th, 2011

    Nothing wrong with that scenario however I have called on several occasions to get my rate lowered [even if I'm not really carrying a balance] and I often get a lower rate, and if not they usually give me a date to call back to ask again with more success – they obviously will lower it at least some without much huhu

  3. Erin D October 29th, 2011

    Hi Kerry,

    This is not in regards to lowering interest rates, but my husband and I have differing opinions about paying cards off and increasing our credit scores.

    He thinks that you should pay off MOST of your balance, leaving a small amount each month, in order to raise your score as quickly as possible.

    I think that you should pay OFF your balance each month because it makes you look more responsible, plus who wants to pay 20% interest, even on $10?

    Basically, I’m asking what the best way to raise your score is, as quickly as possible, using credit cards.

    I look forward to your response, always enjoy your posts, so informative and helpful.

    Thanks,

    Erin D

  4. Carol October 30th, 2011

    Great idea~ anything to help get out and stay out of credit card debt is worth it. My husband and I learned this lesson fairly cheaply (about $500.00 worth of debt) and we got out of debt quickly as he was making good money. Jump forward 7 years and through no fault of our own we now live below the poverty level, something very few people that know us realize. We have lived carefully, frugally and with no credit card debt for years. And our 18 year old has learned some valuable lessons.
    Great site Kerry ~

  5. NCN November 4th, 2011

    This also works with monthly bills, like satellite television or cell phone bills. I do this once or twice a year. Great post!
    -NCN

  6. Laura November 15th, 2011

    I literally just got off the phone with my credit card company and they lowered my rate from 19.5% to 10.9%. At first they were going to lower it to 12.9% with a $35/year fee, which still would have been better, but when I asked if they could wave the fee, they said they could lower it to 10.9% with no fees permanently.
    So thank you for the advice, it actually works!!

  7. Bob January 30th, 2012

    This was great advice. I got off the phone with my credit card company and they lowered my rate from 18.5% to 9.9%. Thanks!

  8. Josh re: debt help February 28th, 2012

    Great advice. Bold, but good advice. I use to work for a large bank and sometimes we would coach our clients on this very sort of thing when they really needed a helping hand with their debt. The funny thing is that our bank staff even did this with their own credit cards. Not all creditors will go for this, but many will.
    If you need help getting your debt paid down, this is a great place to start.

  9. Jenny March 30th, 2012

    Does this advice also work with a line of credit interest rate? TD is raising mine 3.75% beginning April 2 – so I’ll be paying 9%, the same rate as my TD Emerald Visa.

  10. Jenny March 30th, 2012

    I tried lowering the interest rate on my TD Visa, which is at 9.75% to something like 5%. He told me it was all dependent on Equifax and that the next time Equifax reviews my file (in my case, it’s June) to call back.

    That sounded like bullshit. Was it?

  11. Kerry March 30th, 2012

    Hi Jenny, I’d call back in a week. :) Chances are you’ll connect with a more helpful Customer Service agent. Also, be super super nice on the phone. Ask the agent how their day is going. I’ve found success with phone agents by being polite — it’s a tough job and many customers are quite short with them. That’s my advice. ;) Try, try, again.

  12. Jenny March 30th, 2012

    Thanks, Kerry. I have a question about Line of Credits. Since TD is raising my interest rate on the LOC to 9.5% – nearly as much as the Visa I have – would the smart thing to do be to pay off the balance ASAP and transfer the LOC to another bank? Is that even possible?

    And would it look bad on your credit report?

  13. Nick March 10th, 2013

    Great advice Kerry, and nicely communicated.

    I’ve been looking around for decent money-saving tips, just for food for thought and ideas myself; I genuinely wasn’t aware you could negotiate a lower interest rate, but it’s something I talked about recently in an article – basically saying to always negotiate… so this is a great tip.

    As I said – nicely communicated too, it’s all very well to give tips but often ‘advice writers’ don’t lay out practical steps for achieving the tip they preach, so this is another useful article, I’m getting to like this blog a lot!

    Out of interest, how did you find out that you could do this?

  14. Katrina April 24th, 2013

    I also tried this, and have been trying for a number of years.

    Unfortunately they seem unwilling to help those customers like myself who carry forward a balance close to their credit card limit…despite the fact I always make payments on time and pay more then the minimum required.

    I am struggling and experiencing financial hardship (like most of us right now), yet my interest is more than half of my minimum payment required each month.

    Frustrating when you have been making double the minimum payment for the past while and your balance barely moves, yet they are unwilling to help at all.

  15. Jen O May 2nd, 2013

    We have had the same bank and credit card for over 13 years now. Our credit scores are both over 800. We use our card with our everyday purchases so that we can accrue points. I pay off the total bill twice a month so that we never carry a balance. I have asked several times to lower our rate to anything lower than 8% and have been given the same answer every time, “that 8% is the best they can do”. It would be nice to know that the option is available in case we need to ever carry a balance. Is this a common issue with other people?

  16. Aceling October 23rd, 2014

    I want to thank you for all you do for us poor saps who have issues with money, sound common sense and life. Here is an excerpt from the Debtors Anonymous website that may be interesting to some of your readers. Be well, and keep writing!

    Most compulsive debtors will answer “yes” to at least eight of the following 15 questions.

    1. Are your debts making your home life unhappy?

    2. Does the pressure of your debts distract you from your daily work?

    3. Are your debts affecting your reputation?

    4. Do your debts cause you to think less of yourself?

    5. Have you ever given false information in order to obtain credit?

    6. Have you ever made unrealistic promises to your creditors?

    7. Does the pressure of your debts make you careless of the welfare of your family?

    8. Do you ever fear that your employer, family or friends will learn the extent of your total indebtedness?

    9. When faced with a difficult financial situation, does the prospect of borrowing give you an inordinate feeling of relief?

    10. Does the pressure of your debts cause you to have difficulty sleeping?

    11. Has the pressure of your debts ever caused you to consider getting drunk?

    12. Have you ever borrowed money without giving adequate consideration to the rate of interest you are required to pay?

    13. Do you usually expect a negative response when you are subject to a credit investigation?

    14. Have you ever developed a strict regimen for paying off your debts, only to break it under pressure?

    15. Do you justify your debts by telling yourself that you are superior to the “other” people, and when you get your “break” you’ll be out of debt overnight?

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