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5 Tip to Negotiate a Lower Credit Card Interest Rate

5 Tip to Negotiate a Lower Credit Card Interest Rate

Do you use credit cards? Personally, I try to avoid using them most of the time. I’ve found that it’s far too easy to pull it out and pay for everything. Plus, I’m somehow always end up spending more than I planned. But if you are like most people, including me, you do use one at least occasionally.

Of course, if you use it often, it eventually catches up with you when the bill comes in the mail. If you aren’t able to pay it off in full each month, you may end up with high interest charges to pay each month on top of the cost of your purchases. But negotiating a lower credit card interest rate can help you get your purchases paid off without wasting as much money on interest.

Here are some tips to help you negotiate a lower credit card interest rate.

1. Don’t Switch Cards

Although it may be tempting to try to get a credit card from a different company and transfer the balance, it may not work to your advantage. Each time you apply to get a new credit card, the issuing credit card company does a hard inquiry to your credit report. Each of these hard inquiries can lower your credit score a few points.  This lessens your chance of being approved for a lower interest rate because you become a bigger credit risk. Stay with the card you have and use your loyalty to your advantage when you ask for a lower interest rate.

2. Shop Around

I know I just said not to switch credit card companies. I still think that is a good rule to follow in general. At the very least, you should not switch companies often. However, you can compare rates to see if you can find a better deal without having a hard inquiry done. Hard inquiries are done when you apply, not when you are just window shopping, so to speak. Looking around may find you a company that wants your business bad enough they are willing to give you a lower rate. Then you can apply and only have your score dinged once.

3. Call Your Credit Card Company

Calling your current credit card company may take you a little time, but it could be worth it. Few people actually call their company and ask for a lower rate. According to one source, 75% of cardholders who ask for a lower rate get it.

If you have been faithfully making your payment for several years and always pay on time, you may have a little leverage when you call. Have a figure in mind when you call your credit card company. Point out that you are a good and faithful customer but you would like to be rewarded for that. Keep your conversation professional and polite, but don’t be afraid to call back and ask for a manager if you are told no the first time.

4. Know Where You Stand

When you call your current card issuer, it helps if you know your current interest rate as well as your current balance. Make sure you have been paying at least the minimum and always on time. Whether or not you are able to secure a lower rate can be affected by your current card balance vs your card limit. So, know these numbers before you place the call.

5. Make Your Request Reasonable

Obviously you aren’t going to get your interest rate down to zero because credit card companies are out to make money too. But if you look at other offers you get in the mail or do a little searching on your own, you have a baseline to start with. Tell the representative what the other interest rates are that you’ve been offered. They may be willing to match or beat other companies to keep your business.

Have you ever tried to negotiate a lower credit card interest rate?

About Kayla Sloan

Kayla is a mid-20s single girl living in the Midwest, USA. She is focused on paying off her consumer and student loans, while simplifying her life and closet. You can join her on her journey at ShoeaholicNoMore or follow her on Twitter.

4 comments

  1. I think comparing credit card companies is a great idea to get your options out on the table before committing.

  2. Ooooh, this is a great idea! It’s especially helpful if you’re carrying a balance month to month and trying to pay off the cards. I prefer to ask for credit line increases. That’s because I pay off my cards at the end of each month to get reward points, so I never have to worry about the APR. Increasing your credit limit (responsibly) changes your debt-to-income ratio and could improve your credit score over time.

    • That’s a good tip. You just have to be super careful about using the credit responsibly. I do not recommend it for people who have struggled with overspending on credit in the past unless they’ve gotten that habit under control first. 🙂

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