How To Lower Your Credit Card Interest Rates

Work with your card issuers to cut the amount you pay each month

stack of credit cards

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If you're one of the roughly 35% of credit-card holders in the U.S. who carry credit card debt from month to month, then you may be looking for ways to cut that bill. It can be surprisingly easy to lower your interest rate with your credit card companies. Follow these five steps to lower your credit card interest rate and save money.

The chart below shows two APR scenarios—15% and 20%—which are common fees when opening a credit card.

Check Your Credit Card Statements

First, gather your credit card statements together. It's important to know your credit history, payment schedule, and other important details before calling your credit card company and asking for a reduced rate. Note your current interest rate so you can negotiate, and you may also want to compare your rate to that of average credit card rates to see where you stand.

On the statement, you will see a customer service number. Call the number and key in the option to speak to an operator. The operator should be able to connect you with the correct person who can negotiate your rate.

Although physically picking up the phone and calling your credit card company may seem like a time-consuming—and potentially daunting—process, think of it this way: This phone call could potentially save you hundreds—maybe even thousands—of dollars on your credit card payments.

Ask to Have the Card Interest Rate Lowered

Once you are connected with a representative, this is the time to begin negotiating your rate. You may want to mention your good payment history, your loyalty to the company, or a high credit score, if you have one.

You should be polite when asking for an interest rate change. If you yell or become belligerent, then the customer service representative will not be as willing to help you. Politeness goes a long way in situations like these, though it is important to be persistent.

Keep in mind that you may run into difficulties getting a reduced rate if you have a history of late payments, a low credit score, or a lot of outstanding debt.

Your credit card company wants to continue to make money off of your account, so generally, it will not bring your interest rate down to zero. However, it probably also wants to prevent you from defaulting, so it may decrease your interest rate if you make a good case.

Ask About Qualifying for a Lower Interest Rate

If you are unsuccessful in getting a lower interest rate by asking, you should seek more information. If you're being denied because of late payments, ask the representative what you can do to qualify for a lower interest rate in the future. You may simply need to wait longer and make payments on time in order to become eligible.

You also can try to call again in a few weeks. It can't hurt to ask to be reconsidered. You may want to mention that you have a 0% or other low-interest card that you can transfer the money to.

Try Again if Needed

If you are successful in getting your interest rate reduced, don't stop there. Try again in a few months, because the company may be willing to offer an even lower interest rate. If you have an initial rate of 18%, they may lower it to 12%. When you call again they may lower it to 9%. This could save you a lot of money over the long term.

But this may depend on the current financial climate, how interest rates are doing, or the state of the economy.

Make Your Payments in Full and On Time

Always make your payments in full and on time (unless you have gotten specific permission to skip a payment). Credit card companies can raise your rates if you fail to pay on time. They will be less likely to lower your interest rates if this is the case as well. That's why it's important to consistently pay your bills on time and in full. If you are considered a credit risk, you will not qualify for a lower interest rate.

Putting it simply, the steps for lowering your credit card interest rate are very similar to that of raising your credit score. For example, you should focus on making your payments on time and work on getting your balance lower so that you are not too near the credit limit.

Alternative Moves

If all else fails, you may be able to open a balance transfer credit card at a different bank with a low or 0% introductory APR. You need at least fair credit to open most balance transfer cards, and you'll want to make sure you can pay off your balance before the promo period ends.

You also could take out a consolidation loan at a lower interest rate and use the loan to pay off your credit card balances. If you choose this option, you will need to stop using your credit cards completely so that you don't end up having payments on your consolidation loan and your credit cards at the same time. 

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  1. National Foundation for Credit Counseling. "Who We Help." Accessed Aug. 1, 2021.

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