Tips to Lower Your Credit Interest Rate

Of all the debt that you carry, chances are your credit card is the one with the highest interest rate. This means that not paying off your balance in full each month (or at least a significant portion of it) can lead to you paying back far more money than you actually owe. If you’re struggling with making your payment on time (or if you feel that you shouldn’t be paying such a high interest rate), we’ve got some tips to help you lower your credit interest rate.

Understand Your Credit History

The best contenders for getting their interest rates lowered are people with good credit scores and who always pay their balance in full/never miss a payment or, on the opposite end of the spectrum, those who are on the verge of bankruptcy.

Before you do anything, make sure you have all of your information in order. If you can, get a copy of credit history. If it’s a time sensitive matter, make sure you have a copy of your latest credit card statement and know how up to date or behind you are on making payments. Know your interest rate, and more importantly, know the interest rates available to your with other banks or cards. Chances are you’ll need to haggle, or at the very least present a convincing case that you’ll switch to another bank if they don’t help you. If you’ve received credit card offers from other banks, for instance, now’s the time to collect them and read them over.

Do Your Research and Be Reasonable

Remember to keep your demands reasonable. If you call your bank expecting them to lower your 19.9% interest rate to 5%, they’re going to laugh at you and hang up the phone. Have an idea of what other cards are offering so you’re able to negotiate properly. As an added bonus, if you already know what your other options are, the thought of leaving your current bank for another one is far less daunting. Be as prepared as you possibly can be before picking up the phone.

Make the Call

Give yourself a pep talk before calling if you need to. Remember that thousands of people make exactly the same call you’re about to every single day, and that your request is completely reasonable. Stay calm, stay polite, and stay focused on your goal, no matter how much the person on the other end might try to sway you.

Chances are, the first person you speak to on the phone is not going to be the one who can help you. Make sure to sound authoritative but polite – you want them to understand that you know what you’re talking about and exactly what you need (avoid sounding uncertain or like you lack confidence). Ask for someone who has the authority to lower your interest rate, and keep inquiring until you’re paired with someone who can (ideally a supervisor).

Tell them exactly why you’re calling, and have all of your information ready to go (credit card number, interest rate, possibly your social security number for ID purposes, most recent statement).

Show Them You’re Serious

It’s also best to have a solid alternative ready. So, if you’re calling your bank and hoping to have your card with no annual fees and a 19.9% interest rate reduced to somewhere in the 14-15% range, you want to make sure you have another viable option to prove you’re serious (for instance, a card with another bank that also offers no annual fees, but instead has an interest rate of 9.9%). They’re far more likely to lower your interest rate than they are to lose you as a customer completely.

That being said, be prepared for no. It’s disappointing, but it’s not the end of the world. Wait a few days and try calling back. This time, you’ll hopefully speak with someone else who’s more inclined to help you. At the very least, your persistence will show that you mean business.

What To Do if They Say No

If they absolutely refuse to budge, it’s time to show them you’re not joking around. Practice what you preach and transfer your debt to a lower interest card. See if the bank you’re currently with is willing to offer you a new card with a lower interest rate (though be prepared to lose any perks your current card might have like cash back or reward points).

If that doesn’t work for you (or you’d rather part ways with the bank altogether), apply for a card with one of the other banks you’ve discovered in your research (or one that has already extended an offer to you). If you decide to open a new card, do your absolute best to pay off the remaining balance on your current card as quickly as possible so you can wash your hands of it.