How to Negotiate a lower Credit Card Interest (APR)

Daniel's picture

Most credit card lenders charge anywhere from 0 to 20% in interest (APR). I’ve seen some particularly creepy banks that charge as much as 35%! Most people do not realize that you can negotiate with your credit card company for a lower rate, especially if you’ve had any of your credit cards for a long time.

All you need to do is to call them up to insist on a lower rate. Shoot for 9% to 15%. You’ll be surprised at how easy it is to save yourself a lot of money.

Here’s how to do it:

1). Start with a credit card that you’ve had for a long time. One that you have never been late on with payments.

2). Look on the back of the card and dial the customer service number.

3). Start negotiating. Here’s a sample script:

Sample Script

You: (Upbeat and polite) “I just got an offer in the mail for a new credit card that has an introductory interest rate of only 6.9%! I don’t really want to switch cards, because your service has been wonderful. But even though I’ve had your card for five years, I’m still paying a 19% rate on my balance. I’m going to have to transfer my balance unless you can lower the interest rate.”

Them: (Over the sound of keyboard keys being tapped as your credit and payment history are being examined.) “Hmmm … well, that is the standard rate … but let me see …”

You: “Of course, I understand that, but I can pay a lot less in interest if I transfer my balance. I really need you to reduce the rate to 9% or so.”

Them: “Hold on while I check with my supervisor … OK, how about 9.9%?”

You: “No problem.” (Now pat yourself on the back for saving some bucks!)

This may not work as well if you’re frequently late on your payments and over your head in debt. But it can’t hurt to at least ask for an interest rate reduction. If you have a solid track record, handle your obligations and are generally polite, your lender should be willing to offer you a lower rate to keep from losing you to their competition.

4). Keep trying. If you don’t get what you want the first time, try to get another customer service rep or a supervisor on the line. They still won’t lower the APR? Mark in on your calendar to call them back in a few months.

5). Don’t be angry. I have found that I am far more successful in all financial endeavors when being polite. These financial “gatekeepers” have angry people calling them all day long. Imagine what that must be like? Aren’t you glad you’re not them? I’ve found that if you’re nice and treat them with extra respect, they often return the favor and give you a little extra care.