How to Lower Your Credit Card Interest Rate in 4 Steps
Loyal customers that have a solid payment history with a credit card company may want to lower their credit card interest rate. Learn how this can be possible.

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

As an educated consumer and a responsible borrower, you may be wondering how you can lower your hefty credit card interest rates. After all, a few years have probably passed since you first applied, and perhaps your credit score has gone up since then. Luckily, it’s very possible to score a reduced rate by following these steps:

  1. Work to improve your chances of getting approved by following good credit habits and ensuring you have a solid history of on-time payments.
  2. Research your current interest rate and how it stacks up to what competing credit card companies are offering.
  3. Call your credit card issuers to negotiate a lower interest rate, explaining why you deserve it.
  4. If you’re rejected, try again and ask to speak to a different person, or consider alternative options.

1. Improve Your Chances of Getting Approved

Since interest charges are a big moneymaker for credit card issuers, a reduced rate is a big ask. Credit card companies will likely only be willing to bend for their best customers, so you’ll first want to do everything you can to set yourself up for success.

This means ensuring your credit score is in tip-top shape—specifically, a “good” FICO rating or better. Aim for a FICO score of at least 670 before you ask for an interest rate reduction, although you may want to aim for 740 to bump yourself up to the “very good” bracket.

You’ll also want to ensure you have a reliable history of on-time payments. If you’ve had a shaky history of missed or late payments, you may want to focus on making on-time payments for a year before you ask for a reduced interest rate.

Improving your credit standing, especially if you’ve previously struggled with negative items, is a process that takes time. Rather than looking for a quick-fix solution, focus on building good habits—it can only help when it comes time to ask for a reduced interest rate.

2. Do the Research

Now that you’ve worked to improve your credit standing, you’ll want to do some research before calling your credit card issuer. First, check what your current interest rate is. You can find this on your monthly credit card statement. How does your rate compare to what’s considered “good?” How does it stack up to rates competitors are offering?

What’s a Good Interest Rate on a Credit Card?

As of September, the average credit card APR charged is 16 percent. If your interest rate is even a few percentage points below this number, that could be considered a good rate, and negotiations to go any lower may be unsuccessful.

On the flip side, if your interest rate is substantially higher than average, you may have more wiggle room to negotiate—especially if you’ve improved your financial standing and credit score since you first applied.

What Are Competitors Offering?

Credit card companies need to offer competitive interest rates in order to stay in business. They know it’s a competitive industry and that losing customers is expensive. If you can find comparable cards with lower interest rates, this can be ammunition in your plea for a lower rate.

Look at other available cards and their terms and interest rates. Take note of the card name, credit card company and interest rate. Keep this handy for when it’s time to call your credit card issuer. The more specific you can be, the better.

In a 2019 study, 81% of those who asked for a reduced interest rate received one. The average reduction was approximately 6 percentage points. Source: CompareCards.com

3. Ask Your Credit Card Issuers

Once you’ve researched the competition and worked to improve your chances of getting approved for a lower interest rate, it’s time to begin calling your credit card issuers.

If you have multiple credit cards, you’ll want to call all of the issuers. You may want to start with the card you’ve had the longest, because you’ve had time to build up a track record as a loyal customer.

Alternatively, you could start with the card that carries the highest interest rate. A reduction here could help you save more money, but keep in mind that you won’t necessarily be able to leverage your long history as a reliable customer.

Start by explaining who you are and why you deserve consideration for an interest rate reduction. Make sure to mention your credit score and how many years you’ve been a customer. Consider the following script:

“Hi, my name is ____, and I’ve been a customer since ____.

I’ve always made on-time payments, and I have a [good/excellent] credit score of ____.

I’m calling because I’d like to lower my interest rate, which is currently __percent.”

Do: Research beforehand, have specific numbers and know your worth as a customer.

Don’t: Go into a call unprepared or without knowing exactly what you’re asking for.

How to Ask for a Lower Interest Rate: Hi, my name is ____, and I’ve been a customer since ___. I’ve always made on-time payments, and I have a [good/excellent] credit score of ___. I’m calling because I’d like to lower my interest rate, which is currently __%. Source: Debt.org

Then, explain the reason you want an interest rate reduction. Maybe you’ve recently faced furlough or wage cuts or you need to pay off expensive medical bills. Or maybe you’re just trying to improve your credit score and would like to pay down your debt.

Do: Be factual and explain your situation.

Don’t: Be rude, demanding or entitled.

This is also a great time to bring up competitors. If you prepared for the call, you will be aware of competitors and what those other companies are offering. Be specific—mention other credit card companies and their APR offers, and suggest that if you aren’t able to reach an agreement, you’ll consider taking your business elsewhere for more competitive rates.

Do: Be specific about what other competitors are offering and see if they will match rates.

Don’t: Cancel your card if you don’t get a reduced rate, as this may hurt your credit score.

If you score a lower rate—congratulations! Now move on to the next credit card issuer. If you receive a “no,” or a compromised rate that is still higher than you’d like, try again in a few weeks and ask to speak to someone different.

Do: Be diligent about following up or speaking to a supervisor if things aren’t faring well.

Don’t: Give up after the first try. Ask for the reasoning behind a “no” so you can change your situation to get the rate you want.

Does Asking for a Lower Interest Rate Affect Credit Score?

The only way asking for a lower interest rate could hurt your credit score is if it requires the creditor to pull a hard inquiry. Credit card companies may do this to look at your credit report to see if you qualify for a lower interest rate.

A hard inquiry may cause your credit score to drop a few points—however, it can only affect your credit score for up to 12 months. That said, if you successfully score a lower interest rate, it may indirectly help increase your credit score since paying off your debt will be less costly.

Remember that credit card interest rates aren’t reported to credit bureaus since they don’t directly affect your credit score, so a hard inquiry is the only scenario that would hurt your score.

4. Consider Alternative Options

If your credit card issuer won’t budge on your interest rate, it may be time to consider other ways to lower your credit card interest rate. These are typically temporary solutions while you work to pay down your debt, and they don’t result in long-term reduced rates.

Balance Transfer

If you’re unhappy with your current interest rate, a balance transfer allows you to transfer your current account balance to a different card with a lower interest rate. You then make payments to your new account, saving money in interest charges.

Keep in mind that balance transfer interest rates, while low, are usually temporary. This means your introductory rate will likely increase after the promotional period is over. Aim to pay off the majority of your debt before this happens to make the most of your balance transfer.

Debt Consolidation

With debt consolidation, you can take multiple high-interest credit card balances and combine them into a single loan with a potentially lower interest rate. Just keep an eye out for fees and penalties. Additionally, you’ll want to review the loan terms and restrictions to see if the repayment timeline is suitable for your needs.

Long-Term Benefits of a Lower Interest Rate

It’s no secret that a lower interest rate is favorable. It saves you money when you’re paying off credit card debt. However, for those with significant credit card debt, a lower interest rate may also allow you to pay off your debt sooner. This, in turn, saves you more money in interest over time and allows you to see an increase in your credit score sooner.

Remember to maintain good credit management even after you’ve scored a lower interest rate and paid down your debt. On-time payments, low credit utilization and a long credit history are all important things to keep in mind. Despite good credit management, errors are surprisingly common in credit reports, which can cause your score to dip for unfair reasons. Learn about how credit repair can help you dispute these questionable negative items and get you back to the credit score you deserve.


Reviewed by Kenton Arbon, an Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Kenton Arbon is an Associate Attorney in the Arizona office. Mr. Arbon was born in Bakersfield, California, and grew up in the Northwest. He earned his B.A. in Business Administration, Human Resources Management, while working as an Oregon State Trooper. His interest in the law lead him to relocate to Arizona, attend law school, and graduate from Arizona State College of Law in 2017. Since graduating from law school, Mr. Arbon has worked in multiple compliance domains including anti-money laundering, Medicare Part D, contracts, and debt negotiation. Mr. Arbon is licensed to practice law in Arizona. He is located in the Phoenix office.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.


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