How to Negotiate A Lower Interest Rate on Your Credit Card

  • 3 min read

You don’t have to be Samuel L. Jackson (or William Shatner, for that matter) to negotiate your way into a better deal. Credit card issuers are running a business, and they’re often willing to work with their customers to keep them happy and loyal.

One case when this comes into play is when realizing your interest rate isn’t as good as it could be. If you receive an offer for another credit card with a better interest rate than your current card, this is a good tip-off.

A large percentage of credit card users never address this disparity, which means they’re stuck paying a higher-than-necessary APR for as long as they own their card. Since credit card companies aren’t known for lowering interest rates on a whim, you have to ask in order to receive.

When the time comes and you’re ready to ask, stick to the following guidelines.

  1. Be polite, calm, and friendly. You’ve probably heard the old saying about honey catching more flies than vinegar. Most people have heard it, but many don’t embrace it! There’s a chance that a phone call to your card issuer won’t result in a lower interest rate, but the chances of it succeeding are very low if you yell, scream, and make threats.
  2. Use the past to build a case. If you want your creditor to do you a favor, then you need to show them why you’ve earned it. Two main points to hit are your account history and your actual credit history. Tell them how many years you’ve had an account in good standing, and tell them your actual FICO score if you know it (and if it’s praiseworthy.)
  3. Mention the competing offers. If you tell your card company that you’re calling because you’ve received offers with lower interest rates, then be prepared to share. They may want to know what issuers have sent you the offers and at what APR. Don’t make up these offers if you haven’t actually received any!
  4. Show them you’re loyal, but that you also care about the bottom line. Making threats isn’t really a fun experience, but sometimes you have to do so. The important thing is to keep a level head; shouting that you’re going to close your account (and likely ruin your own credit score) isn’t a good strategy. Your best bet is to play it simple: tell your card issuer that you would love nothing more than to continue being their customer, but that you really don’t have a choice because good financial sense means going with the lowest interest rate.

If negotiations fail… If you don’t get the lower interest rate then it may be time to follow through on your threat and transfer your balance to the lower APR card. Be sure to read all of the terms and conditions on the card before signing up, and pay special attention to fees and interest rates on balance transfers.

Christopher - BSc, MBA

With over two decades of combined Big 5 Banking and Agency experience, Christopher launched Underbanked® to cut through the noise and complexity of financial information. Christopher has an MBA degree from McMaster University and BSc. from Western University in Canada.