How to Lower Credit Card Interest and Save (Hint: Just Ask)

how to lower credit card interest

Most people don’t bother asking for a lower credit card interest rate. Yet, earlier this year a survey by CreditCards.com found that 78 percent of those who do ask are successful in getting their interest rate lowered.

Under no circumstance is a credit card company obligated to provide you with lower credit card interest rates. However, it is expensive for them to acquire new customers. And the last thing they want is to lose you to a competitor.

That means if you know the right way to ask for it, you’ll know how to lower credit card interest in no time.

How to lower credit card interest

1. Build positive credit

When a credit card issuer considers you for a lower interest rate, they’re going to look at the state of your credit. Not only with them but with all of your creditors.

The best way to build and maintain positive credit is to:

  • Pay your bills on time, every time
  • Never use more than 30 percent of your available credit card limits
  • If possible, return your credit card balances to zero every month
  • If you have high credit card balances, pay them down
  • Keep new applications for credit to a minimum

The longer you’ve had positive credit the better. Remember, a positive credit history is a key ingredient for a good credit score.

However, pay special attention to your credit history over the past 12 months before reaching out to your credit card servicer.

2. Check your credit reports and scores

Never assume you know your credit scores or what’s on your credit reports. They change all the time.

Before calling your credit card company, take a look at your credit reports from all three major credit reporting bureaus: Experian, Equifax, and TransUnion. It’s important to see all three because what’s on one report may not be on another.

You can request free copies from each one every 12 months through AnnualCreditReport.com. Or, you can purchase them directly through Experian, Equifax, and TransUnion.

As for your credit scores, each of the three credit reporting bureaus will have its own credit score for you, depending on what’s in the report they have on file. You can purchase your scores from all three bureaus at myFICO.com.

But, before paying for anything, you may want to consider signing up for credit monitoring sites that give you access to your scores and reports for free. Examples of these include CreditKarma (for Equifax and TransUnion) and Credit.com (for Experian).

If you come across anything on your credit report that’s not looking right to you, it could be dragging down your credit score. In that case, it’s more important to being the process of disputing errors with the credit bureaus than trying to get a lower interest rate on your credit card.

And if you see some recent late payments you’d forgotten about, you may want to rack up a longer history of on-time payments before giving your credit card issuer a call.

Otherwise, if your credit is better now than it was when the card was issued to you, then you’re good to go.

3. Research interest rates for your credit score

Could you get a lower interest rate on a credit card from a different issuer?

Find out as soon as you can if this is the case. This can serve as leverage when you call and ask for a lower rate on your existing card.

Look at credit card comparison sites that let you search offers by credit type (Excellent, Good, Fair, Poor, Bad). Keep a list of these offers so you can quote them to the customer service rep when you call.

4. Call your credit card company

You’ve learned all the information you should gather. Now it’s simply a matter of picking up the phone and asking for it. Here’s a step-by-step script for how to lower credit card interest.

First, call the number on the back of your credit card. Politely tell the customer service representative that you’re calling to ask for a lower credit card interest rate.

Tell them how long you’ve been a customer with them. And (this is key) that you want to remain one with them. However, you’re considering other credit card offers with lower interest rates.

Then ask if they can match the interest rates you quote to them. If they can’t, ask how close to them they can get. Make sure they understand that you are considering canceling your card with them if they cannot get you a better rate.

If they offer you a lower rate you’re happy with, thank them and ask for written confirmation. But if they tell you they cannot lower your interest rate, ask to speak to a supervisor.

And if you’re unable to speak to a supervisor, or they’re unable to help you, call back a different day.

5. If they won’t lower your interest rate

As disappointing as it will be, you do have a couple of paths you can take if you’re unable to lower your credit card interest rate at this time.

Wait a few months. 

If you don’t have a high balance that’s racking up interest every month, consider waiting it out. Give your credit card company a call six months from now and see if you get a different answer.

Do a balance transfer. 

If you have a high balance that could really use a lower interest rate, consider a balance transfer to a new card with a lower interest rate offer. And if you go this route, you can either:

  • Keep the old card, which will return its balance to zero and help with your credit utilization ratio
  • Cancel the old card, which will ensure that you cannot charge up a bunch of new debt on the old card

Either way, be sure you read carefully the terms and fees of your balance transfer. A 0% introductory offer will be over before you know it. And, it probably doesn’t apply to every type of transaction.

Always aim for zero fees

If learning how to lower credit card interest works for you, then that’s great. Just don’t let it become an excuse to charge more than you can afford.

The best case scenario for any credit card user is to never pay interest fees because you return your credit card balance to zero every month. Certainly, there will be exceptions to this rule, in which case the lower interest rate pays off.

But not matter your interest rate, always aim for racking up zero fees when you have a credit card.

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