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.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.57% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|