How to Get a Lower Interest Rate on Your Credit Card

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If you have credit card debt and are hoping to lower your credit card interest rate, you have come to the right place! If you have a balance on a credit card, interest grows over time (even if you do not make future purchases) until the balance is paid off. However, you can lower the interest rate on your credit card to reduce your total interest payments over time and pay down your principal faster.

Imagine you have a large balance on a high-APR credit card. If it charges 18% APR and you pay the minimum monthly payments, you will pay a lot of interest charges before the account is paid off. But if you get a lower interest, say 12% instead of 18%, you can save significant money on interest costs. 

So if you are wondering how to get a lower interest rate on your credit card, here are some ways you can get lower interest rates on your credit cards to save money! If you have more than one high-APR credit card, it is best to get a lower rate on the card with the highest interest first.

how to get a lower interest rate on your credit card

Negotiate a Lower Interest Rate on Your Credit Card

One of the best ways to get a lower interest rate on your credit card is to negotiate the rate with your credit card issuer. If you are paying a higher than average interest rate on your credit card, you can contact your creditor and ask for a lower interest rate. While the worst your creditor can say is “no”,  you can explain why you are asking for a lower interest rate. If you have made regular, on-time payments in the past (for at least a year) and have a low balance, your credit card company/issuer may lower your rate.

Just saying that you have been a good customer may not be enough to cut it. If you are struggling to make even the minimum payments because of a specific hardship, then mentioning that and asking for a lower rate might yield better results. 

If your credit card issuer still does not lower your rate, you can use different tactics. For example, if you have a fairly good credit history, you can shop around and find competing cards with lower interest rates being offered by other credit card companies out there. If you have been offered a card with a much lower interest rate from another company on their card, it will help you negotiate with more authority with your current credit card issuer.

Another tactic you can use to negotiate a lower interest rate with your credit card company is to tell them that you are considering a balance transfer with another card provider. Your creditor may lower your interest rate to keep you as a customer.

Before you call your credit card company and ask for a lower interest rate, make sure you evaluate your current situation to see where you stand as a customer. If you have made regular, on-time payments in the past (for at least up to a year) and have low balance, you will be in a good position to negotiate with your credit card company to have your interest rate lowered. 

If you missed any payments or made any late payments in the past or have some other negative marks on your credit report, build your credit first before you call your credit card company and ask for a lower rate.

Here are the best ways of improving your credit score:

⦁Paying your minimum payments and bills on time, every time

⦁ Keeping your balances low

⦁ Not applying for too many credit cards and other credit

If your credit score is strong or has improved since you got your current high-APR card, it may be time to call the issuer of the current credit card and negotiate for a better rate. 

Your credit card company will be more favorable about lowering your interest rate if you have a healthy credit history.

Sample Scripts to Negotiate Your Interest Rate With Your Current Credit Card Company

You can use all of these scripts in your credit card interest rate negotiation, some variation of these, or just one of them. I hope these give you some great ideas of things you can say! Let’s get you saving money!

“Hello there! I’ve been a loyal customer for _____ months/years, and I noticed as I was shopping around for new credit cards that my interest rate at ____% is quite high. I have been making on time payments for some time now and I’d really love to get that interest rate down. Is there anything you can do to lower my interest rate on this card?”

“I am considering doing a balance transfer over to ______, and they are offering a 0% interest rate for a short time but then after that period is over their interest rate is still lower than yours. I’d like to stay a customer of yours but it’s hard to when the interest I’m paying is so high and I have other options. Can you help?”

“I have already been approved for another credit card with a lower interest rate of ____ but I really would prefer to stay a customer of yours. Would you be able to match or beat that interest rate on this card?

“My partner recently lost their job and the interest on this card is starting to become difficult to pay. Would you be able to lower my interest rate for a time?”

Pay Down Your Credit Card Debt Faster

If after all your negotiation, your current creditor still rejects your application, put more money toward your your credit card debt payoff. While it will not get you a lower interest rate on your credit card, it will definitely reduce your total interest payments whether you get a lower interest rate on your credit card or not.

If you have room in your budget to allocate a little extra money toward your credit card repayments, then you can pay less in interest charges by paying more each month. 

Every dollar you pay on top of your minimum payments on your card toward your credit card repayments goes directly toward the principal of your balance. This means, by paying more each month, you can reduce your balance and total interest payments while getting out of your credit card debt faster on your own.

Just make sure you do not make new purchases with your credit card if they are not in your budget and if you cannot pay off the new debt on your card in full and on time.

Related: Grab my Debt Snowball Calculator to calculate how soon you can pay your debt off with your real balances and interest rates!

Get a Balance Transfer Credit Card

One of the best ways to get a lower interest rate on your credit card for a limited time is to apply for a balance transfer credit card. Most balance transfer credit cards offer 0% or slightly higher interest rate offer for a certain period of time. You can pay no or little interest if you pay off the balance transferred within the promotional period! 

A balance transfer credit card repays your outstanding balances on one or multiple high-APR credit cards. You then pay off the balance transferred from another card (or multiple cards) to the new credit card, a.k.a. a balance transfer credit card, usually at a lower interest rate.

However, you generally need a good credit score to qualify for a balance transfer credit card. You usually cannot carry out balance transfers between credit cards issued by the same creditor. Generally, you can transfer balances from multiple cards to a balance transfer credit card up to the transfer limit it allows.

If you are struggling with credit card debt, one of the best ways to get out of that debt is to get a lower interest rate on your credit card by using a balance transfer credit card.

Consider the following important things when it comes to applying for a balance transfer credit card:

  • Standard APR
  • Length of promotional period
  • Balance transfer limit
  • Balance transfer fee
  • Annual fee

If you are not able to clear all your credit card debt by the 0% interest period or slightly higher APR period, you should know what the interest rate will be after the introductory period expires. Choose a card that has lower standard APR than your current card.

Look for a card that offers a long 0% or slightly higher APR period on balance transfers if you need to pay off your debt slowly. Look for a balance transfer card that offers you a much higher credit limit than the amount you owe on your current card or cards.

Some balance transfer credit cards will charge a fee on the amount transferred, so look for an issuer that offers 0% balance transfer fee or a slightly higher fee. When you are looking for a balance transfer credit card, try and get one with no or a lower annual fee.

If a credit card offers 0% interest on balance transfers for a specific period of time, it can be the best way to get a lower interst rate on your credit card because it allows you to pay off debt fast interest-free during the 0% interest-free period.

Just make sure you plan to pay off the credit card debt on the new card! I hate seeing people make balance transfers and then leave the debt there and get a new card and keep racking up more credit card debt. Balance transfers are a way to help you get ahead of your interest so you can pay off your cards, not a way to make your debt more comfortable and ignore it!

Conclusion

As you can see, there are some ways to get a lower interest rate on your credit card. If you have been a good customer with your current credit card company, the best way to lower your credit card interest rate is to contact your provider directly and ask for a lower on your credit card. You can also pay down your credit card debt as quickly as possible to avoid paying interest. Lastly, you can do a balance transfer from one card to another to lower your interest for a while so you can get ahead of your debt and pay it off!

Which method will you choose? Let me know in the comments! 

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Welcome! My name is Merilee and I’m the creator of Easy Budget. I started this blog to help other families like mine crush debt, budget, manage money, and meal plan like pros!

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