4 Steps to Negotiate a Lower Credit Card Interest Rate

According to a recent survey, over 40 percent of American households have credit card debt, so it’s commendable to decide to take control of the money you owe.1 Paying off your balances can lower your debt-to-income ratio and increase your credit score. If you’re interested in simplifying your finances and freeing up cash, getting rid of credit card debt can definitely steer you in the right direction.

Unfortunately, eliminating that debt is much easier said than done — the average American household carries a credit card balance of $5,700.1 When it comes to paying off debt, the pace at which you’re able to do so has a lot to do with your interest rate. A high rate means higher minimum payments and a greater percentage of your monthly payments applied to the interest charges, not the principle.

There is practically no way to get around interest on a credit card — it’s the price of having access to credit. But while you can’t eliminate interest altogether, you can try to save money by reducing your rate. Here are four steps to negotiate a lower interest rate.


1. Know Your Rates

Some people never review their entire credit card statement, and only really pay attention to their minimum payments and due dates. But if you’re in the dark with regard to your interest rate, you may not know what you’re really paying each month.

Gather all your credit card statements and review your rates. A low-interest credit card rate is about 12 percent, with the national average at about 16 percent.2 Shoot for a rate around these percentages. If your rates currently fall around this range, this is probably the best your credit card company can do. However, if your rates are in the high teens or the 20 percent range, you’ve got nothing to lose by asking for a rate reduction.


2. Check Your Credit

Getting a better interest rate on a credit card will also depend on your creditworthiness, or a positive credit history. This involves paying your bills on time every month and maintaining reasonable credit card balances.

Check your own credit report and score before approaching your creditors. Your credit score can provide clues about your chances of actually getting a better rate. If your report reveals problems, you can make improvements and check again in a few months before contacting your creditor.


3. Research the Competition

Do your homework before making the call. What type of rates are other credit card companies and banks offering? Maybe you’ve received pre-approved credit card offers in the mail. Check the fine print of these offers and determine that card’s standard interest rate, as well as other requirements for approval. If you’re offered a card with a rate lower than your existing card, you can use this offer as a bargaining chip when negotiating with your creditors.

Understand, however, that a pre-approved credit card offer isn’t guaranteed, nor are you promised the best interest rate if approved. But if you have a solid credit history and rating, and you meet the approval requirements, the odds are on your side.


4. Contact Your Credit Card Company

Getting a rate reduction might be easier than you think. In fact, it’s best to keep your request simple and straight to the point. Look for the billing services or customer service phone numbers on your credit card statement. Jot down a script before picking up the phone, and if you have to, read directly from your notes. You can also use the following script:


Hi, my name is ____.  I’ve been a loyal customer for ____ years, and I’m currently paying an interest rate of _____ percent. I’ve received several offers in the mail for credit cards with lower rates. I’m calling to request a lower, more competitive interest rate to match these offers.

(Optional): I would like to remain a customer, but if I can’t get a better rate from you, I’ll need to cancel my account and go with another company.


Only use the cancelling approach if you’ve weighed the risks and have determined that you would actually be prepared to cancel your account and transfer your balance to a low-rate card because you feel that it would benefit you. Remember that when you cancel a credit card or apply for a new credit line, you get a hard credit inquiry on your report, and your score may be temporarily negatively affected.

Play hardball, but be polite. Sometimes, this 30-second script is all it takes to get a better rate with your existing company. After a quick review of your account history, the customer service rep may reduce your rate on the spot. But you shouldn’t go into the call expecting a hassle-free negotiating session. Some credit card companies will make you work for a lower rate.

If the customer service rep isn’t willing to (or can’t) lower your rate, ask to speak with a supervisor. Repeat your script and hope for better results.

If this strategy doesn’t work, give it a few days or weeks and then call back. At this time, you may reach a more cooperative representative or supervisor. If your creditor is still unable or unwilling to reduce your interest rate, you can still pursue other companies, but remember to work on your credit score for best results.



1Resendiz, J. (2020). Average Credit Card Debt in America: July 2020.

2Dilworth, K. (2020). Average credit card interest rates: Week of July 1, 2020.


The information in this article is provided for educational and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. The information in this article is not intended to be and does not constitute financial, legal or any other advice. The information in this article is general in nature and is not specific to you the user or anyone else.

Was this helpful?

Written by:

Barbara Davidson

Babs is Lead Content Strategist and financial guru. She loves exploring fresh ways to save more and enjoy life on a budget! When she’s not writing, you’ll find her binge-watching musicals, reading in the (sporadic) Chicago sunshine and discovering great new places to eat. Accio, tacos! 

Back to Top