How to Lower Your Credit Card APR

Nicolas Cesare  | 

Credit card interest rates are the bane of every cardholder. Nobody wants to have to pay them, but credit card companies are all too eager to charge you interest on every cent of the balance that you that carry over from month to month.

Now what if I told you that you could lower your credit card APR by negotiating with your credit card company? With the right negotiating stance, as well as a good credit score, you can negotiate for a lower APR so that you pay less interest on your balance each month, freeing you up to use your credit card more often and improve your credit score.

Why Credit Card Companies Charge You Interest

To consumers, an APR feels like a ball and chain. However, to credit card companies, charging interest to a cardholder’s balance is one way to make money. Credit card companies will try to offset possible losses from consumers who aren’t paying their bills by jacking up interest rates. Thus, your APR is likely to be higher if your credit card company feels less confident in you as a cardholder.

Credit card companies and other lenders use credit scores to judge a person’s likelihood to pay back debt within a reasonable timeframe. So if you feel like your APR is higher than that of your friends, it’s probably because you have some hiccups on your credit history that are affecting your credit score. However, just because you’ve started out with a high APR doesn’t mean that it has to stay that way forever. You can negotiate with your credit card company for lower interest rates under the right conditions.

How to Negotiate for Lower Interest Rates

The first thing that you need to do is get on the phone with your credit card company’s customer service. You’ll end up speaking to a representative and you will want to ask them to lower your credit card interest rate.

This is the easy part. The tricky stuff comes long before you ever pick up the phone.

In order to have the best position to negotiate from, it’s important that you show your credit card company a few things:

  • Credit Score: You want to be able to show them that you can handle debt responsibly. This means that you should almost always wait until your credit score has improved since your current interest rate was decided. If you’re worried that you credit score might be too low, it might be good idea to repair your credit before calling.
  • Customer Loyalty: A solid history with this credit company helps. The rep will look at your credit score to determine your fitness for a lower interest rate, but he or she will also take into account your reliability with this particular credit card company. It’s easier to negotiate a lower interest rate if you’ve been paying your bills on time consistently for a while now.
  • Better Offers: Finally, just as if you were asking for a raise at work, it’s good to be able to show your credit card company that you’ve received other offers for cards with a better interest rate. Above all, your credit card company doesn’t want to lose you to the competition. If you can show them that the competition has been courting you, then you’re putting the ball in their court and forcing them to make a decision in order to retain you as a cardholder.

Once you have this strong negotiating stance built from a high credit score, a solid history with this company, and the spectre of outside offers, you’re ready to negotiate. Talk to the rep on the phone and mention these three things, preferably in the order listed. They might give you a lower interest rate right away or you might have to remind them that you can take your business elsewhere before they will give in.

If this rep says no, it’s not the end of the world. If you think that your position is strong and you deserve a lower interest rate, then you can ask to speak to their supervisor. Each new person who looks at your case will have a different perspective, so you don’t have to settle if you think that you can get a better deal.

Credit card companies like charging interest because it helps them make money. However, they value having you as a customer more than they value your interest payments. Remind your credit card company that you are an asset with a solid credit history and they will probably be willing to work with you to negotiate a lower interest rate on your credit card.

Looking for more tips and guides on credit cards? Visit our resource and learning center.


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Nick Cesare is a writer from Boise, ID. In his free time he enjoys rock climbing and making avocado toast.

This post was updated December 11, 2017. It was originally published September 22, 2017.