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

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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?

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1 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. 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.

2 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student Loan RefinanceFixed rates from 3.999% APR to 7.804% APR (with AutoPay). Variable rates from 2.480% APR to 7.524% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. See APR examples and terms. Lowest variable rate of 2.480% APR assumes current 1 month LIBOR rate of 2.07% plus 0.91% margin minus 0.25% ACH discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score
  2. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

3 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

4 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.72%-8.17% (2.72%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.50%-8.69% (3.50% – 8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Average savings based on 18,113 actual customers who refinanced their federal and private student loans through our Education Refinance Loan between January 1, 2017 and December 31, 2017. The calculation is derived by averaging the monthly savings of Education Refinance Loan customers whose payments decreased after refinancing, which is calculated by taking the monthly student loan payments prior to refinancing minus the monthly student loan payments after refinancing. The borrower’s savings might vary based on the interest rates, balances and remaining repayment term of the loans they are seeking to refinance. The borrower’s overall repayment amount may be higher than the loans they are refinancing even if their monthly payments are lower.
2.57% – 5.87%Undergrad
& Graduate
Visit Earnest
2.80% – 6.38%1Undergrad
& Graduate
Visit Laurel Road
2.48% – 7.52%2Undergrad
& Graduate
Visit SoFi
2.47% – 7.99%Undergrad
& Graduate
Visit Lendkey
2.57% – 6.65%3Undergrad
& Graduate
Visit CommonBond
2.72% – 8.17%4Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.