Want A Lower Credit Card Interest Rate? Just Ask

If you’re unhappy with your credit card’s annual percentage rate (APR) or your APR is high (hovering well above the current national average of 20 percent), securing a lower one may be as simple as asking your credit card issuer. If you’ve established a history of on-time payments and other responsible behavior with the issuer, you may be able to leverage this history to your benefit. While the issuer may decline your request, it never hurts to ask.

You may also be able to qualify for one of the best 0 percent APR credit cards if your request is denied, although you’ll typically need good credit or excellent credit to qualify for that type of offer. Discover how you can negotiate a lower credit card interest rate as well as explore other available options.

How to ask for a credit card interest rate cut

Asking your issuer for an interest rate cut can seem intimidating — but it doesn’t have to be! If you do your research beforehand, you can be prepared to ask your issuer for a lower rate. Details of your current card and how it compares to similar cards on the market are key to negotiating the best terms for your card. Let’s take a closer look at the negotiation process.

Find competitive credit card offers

Before you call your issuer, look for a credit card that’s similar to yours and compare the interest rates. If you find a similar card with a better APR, take note so that you can share that information when you call your issuer. Credit card companies don’t want to lose your business, which is why they need to stay competitive with other issuers.

However, make sure the offer is actually competitive. For instance, an APR for a bad credit score will differ from a card that requires excellent credit, so make sure the cards you are comparing match your own.

Call your card issuer and ask

With this information in hand, try contacting your credit card issuer directly via the customer service number on the back of your card and asking for a lower interest rate.

Here’s a sample script of what you might say:

For this conversation to go as smoothly as possible, it’s important to be prepared. Know your current credit card terms — including your APR, grace period, statement due date and current balance — and use this knowledge to your advantage as you reveal what you’ve found when researching competing lenders.

If you were able to find a better offer from another issuer, tell your customer service representative. You may find they’re more willing to negotiate if you make it clear you’re considering taking your business elsewhere.

And if you’ve kept up with payments and have a solid history of responsible credit use with your issuer, they may lower your interest rate just to keep your business. The worst they can say is “no.”

Still no luck? You can also try the HUCA method. HUCA stands for “hang up, call again.” As the name suggests, this tactic involves hanging up and trying again if you don’t like the first response you receive. It’s possible a second (or third) customer service representative might be more accommodating to your request than the first.

Other options to lower your credit card APR

If your issuer refuses your request, explore these options to help manage your credit card debt:

• Ask for a temporary break: If your issuer is hesitant to reduce your APR, ask for a temporary reduction instead. For instance, a one-point reduction for six months might be more feasible while still giving you a chance to lower your monthly bill.
• Learn your credit issuer’s policy: Some issuers have a review process that must take place before granting a lower APR; others might have to follow certain regulations to lower a cardholder’s APR. Find out what policies and regulations your issuer follows for the best chances of lowering your card’s interest rate.
• Pause spending on the card: If you can’t lower the APR on your card, try pausing your spending or limiting your spending to the essentials like utility and rent payments to avoid mounting card debt. Once you have paid off your balance in full, you can start using your card for everyday purchases again.

Does a lower rate trigger a hard credit pull?

Maybe it will, and maybe it won’t. It really depends on how the issuer treats your request and what policies must be followed.

If the creditor treats your request for a lower rate as a mere request, the chances are that a soft inquiry — or even no inquiry at all — will be sufficient. A hard pull most often happens when you ask for more credit, and the assumption is that you are preparing to take on additional debt. In the case of asking for a decrease in your interest on your credit card, though, you are not asking for more credit. However, if the lender considers your request as an account change (like asking for a credit limit increase or another one of the bank’s cards that comes with a lower interest rate), then a hard inquiry is likely.

Also, if you have a short credit history, or what is known as a “thin file,” then an inquiry may be more serious. If you have a limited history or a low score, a few points can affect a lender’s decision more than it would for a person with a high score and lengthy history.

Ultimately, it depends on the creditor, what its rules are and what kind of relationship you have with your issuer. The best thing to do is ask your creditor if requesting a rate decrease will mean a hard pull.

Consider a balance transfer card if you’re denied

If you aren’t able to get your interest rate changed, one way to pay less in interest for a limited period of time is to apply for a balance transfer credit card. Most balance transfer cards offer a 0 percent introductory APR on transferred balances that lasts between 12 and 21 months. Just keep in mind that these offers typically come with a balance transfer fee, so you won’t get access to that 0 percent APR for free. However, applying for a balance transfer credit card can be a great option to consolidate debt without further hurting your credit.

With a top balance transfer card like the Wells Fargo Reflect® Card, for example, you’ll get one of the longest offers for purchases and qualifying balance transfers currently available. The Wells Fargo Reflect offers a 0 percent intro APR for 21 months from account opening on purchases and qualifying balance transfers (17.24%, 23.74%, or 28.99% Variable APR thereafter).

Keep in mind that a standard 5 percent ($5 minimum) balance transfer fee applies, and balance transfers must be made within the first 120 days to score this introductory rate.

Improving your credit score can help you secure a lower APR

Whether you’re trying to negotiate a lower APR on your current credit card or applying for a new card, one way to land better interest rates is to take steps toward improving your credit score. One of the easiest ways to boost your credit rating is to pay your credit card bill early or on time every month.

You should also refrain from opening too many new accounts and from closing old accounts. Opening too many new accounts at once leads to multiple hard inquiries on your credit report, whereas closing old accounts can increase your credit utilization and decrease the length of your credit history. Both moves can negatively impact your credit score, along with other factors.

If you have a lot of debt in relation to your credit limit, you can also improve your credit score by paying off your debt. Most experts recommend keeping your credit utilization ratio below 30 percent for the best results, which means maintaining $3,000 or less in revolving balances for every $10,000 in total credit you have.

The bottom line

So, can you get a lower credit card APR simply by asking for it? It’s not guaranteed, but it can’t hurt. However, there is one tried-and-true method for avoiding credit card interest altogether: By only making purchases you can afford, paying your credit card bill on time and paying it off in full every month, you’ll never get charged a dime in interest payments.

If you do end up with debt, make sure you’re getting the lowest interest rates possible. Securing a lower interest rate may be as simple as asking your current credit card issuer to lower your APR. In other cases, it may make sense to improve your credit score or transfer your balance over to a new 0 percent APR credit card, instead.

Frequently asked questions about credit card interest rates

• Will credit credit card companies lower your interest rate if you ask?
  

  Possibly. Credit card companies assign interest rates based on a host of factors, including your payment history, credit score, the type of card you hold and much more. If you have a history of responsible credit use and are able to point to competitors who offer similar products and lower rates, you may be able to get a lower interest rate on your current credit card by asking for it.

• How can I lower my credit card interest rate?
  

  One of the easiest ways to get a lower credit card interest rate is to ask for it. If you have a history of on-time payments and responsible credit card usage, simply call your credit card company and request an interest rate reduction. The worst they can say is “no.”

• What are some other ways I can get a lower interest rate on my credit card?
  

  In addition to asking your current credit card company for an interest rate reduction, you may also be able to get a lower interest rate by improving your credit score. This can help you secure a lower rate on your current credit card and on any cards you may apply for in the future. Additionally, you can consider transferring any balances you may have to a card that offers an introductory 0 percent rate on balance transfers.