Updated on 08.27.14

How To Lower Your Credit Card Interest Rates

Trent Hamm

When I was near my financial low point, I was literally paying hundreds a month in finance charges on my credit cards and needed to lower the interest rates. That money was an enormous burden at the time, since I didn’t have any savings built up and I was also dealing with the “startup” expenses of having a new baby in the home.

I didn’t know at the time that it’s actually not too hard to get your interest rates reduced on your credit cards, particularly if you’re in a situation like I was in. All you have to do is get your information together, call the credit card company, and be willing to play a little hardball on the phone, and you’ll often get a nice reduction in your interest rate. That will directly help your bottom line.

In fact, if I had been able to get a reduction in all of my credit cards when I was in real trouble, I would have easily saved $100 a month. That money, if used properly at the start of a financial turnaround, can make all the difference in the world. It can be the foundation of an emergency fund, light a fire under a debt repayment plan, repay a family member for a debt, and countless other little things that can make all the difference when you’re trying to turn your finances around.

Steps to Lower Your Credit Card Interest Rates

The Balance Transfer Option

You may be able to quickly get your rates to 0% for a period of time by signing up for a balance transfer credit card with a great introductory offer. Of course, you need to be able to qualify for another credit card to do this. If you can, this may be your quickest and most pain free option to reduce your interest charges.

Here is a great resource on the best balance transfer credit cards around.

If you can not qualify for another card, or do not want one, continue to follow the next steps.

Make Sure This Is for You

This tactic works best if you have a substantial amount of debt sitting on credit cards and have largely been able to make your payments up to this point. A few late payments are quite all right, but if you’re being chased by collection agencies, negotiating with the credit card companies won’t really help.

If you’re not carrying a balance on your card or don’t carry a balance regularly, the credit card company is not going to be particularly interested in helping you out because as a customer, you’re not putting much money into their coffers. Simply put, this tactic works best if you have some leverage – you’re currently paying finance charges on your card and you’re threatening to move it to another account.

Another important factor is your current interest rate. If your rate is already around 7.99% or so, there’s not much the credit card company can do to lower the rate. This tactic works best if you have a rate above 13% or so.

Remember, though, any interest rate reduction will help if you’re carrying a balance. A 1% reduction on a card where you’re carrying a $1,000 balance will save you $10 a year. If your balance is higher, you save more. If your interest rate reduction is higher, you save more. For example, if you have a $5,000 balance and get a 5% rate reduction, you’re saving $250 a year from a single phone call – well worth your while.

Prepare for the Call

While you might be tempted to just flip over your credit card and call the card issuer’s number on the back, you’ll have a much greater chance at success if you prepare just a bit in advance.

First, have a copy of your most recent statement with you. Make sure you know what your current interest rate is and also have your account number handy and easy to read. The statement should also provide you with the phone number you need to call.

Next, collect any other offers you might have available to you. See if you have any zero interest or low interest balance transfer offers available to you – in other words, check your recent “junk mail” and/or log on to your online access for your credit card and see what’s available. Get a quote on a personal loan from your local credit union’s website. These will be used as leverage to get your rate reduced.

You should also figure out a target rate to shoot for on the phone. I recommend shooting for 9.9%, but you’ll likely not get a rate that low.

Finally, get in the right mindset. Drink a glass of water. Get yourself calm (because getting worked up on the phone won’t help you), yet motivated to make this work. Then pick up the phone and dial.

Make the Call

The first thing you need to do is get someone on the phone that actually has the authority to change your interest rate. Likely, the first customer service representative that you speak to won’t be able to do that.

So, start off by navigating through their menu until you can speak to a representative. As soon as you can, ask the big question: “Do you have the authority to change my interest rate?” If the answer is no, simply ask, “May I speak to someone who can? Your supervisor, perhaps? Thank you!”

Once you’ve got a person on the phone who has the authority to change your rates, make your case as clearly and succinctly as possible. Here’s a potential script:

“Hello. Lately, I’ve been really having to stretch my finances to make the monthly payments on this credit card, and I need to reduce the interest rate somehow. It would be convenient to keep the balance on this card, but I have some other options that could really save me some money – a zero interest balance transfer offer is sitting right here, for one. Could you reduce the interest rate on my account to, say, 9.9%?”

This puts the ball firmly in their court – and at that point, it’s largely out of your hands. The typical response is a reduction in rate, but not a reduction all the way down to the rate you requested.

Regardless of what you get out of the call, be polite. Say “thank you” for any rate reduction and don’t get enraged if you don’t immediately get a big reduction.

Other Options

Sometimes, you’ll get a rate reduction that makes you happy. At other times, you may not get much of a rate reduction at all – and in that case, you’ll want to do something else. Here are some options.

Seek out balance transfer offers. Moving your balance to another card can help get the finance charge monkey off your back – a useful short term solution.

Seek out another type of debt. Investigate getting a personal loan at your local credit union. A home equity loan is a possibility, but it’s generally a poor idea to change unsecured debt (like your credit card) to secured debt (like a home equity loan).

Lower the offending debt rapidly. Focus all your energies on getting rid of that high interest debt as fast as you can. You might want to work a second job, sell some stuff, or start a side business to generate extra money – and learning how to live cheaper is always a big plus.

For most people with credit card debt, the possibility of success (and the savings that go along with it) with attempting to get your rate reduced is worth the effort involved in picking up the phone and doing it. Good luck!

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  1. Jimbo says:

    Ramit at iwillteachyoutoberich.com provides a far better way to approach this btw.

  2. Arvin says:

    I don’t currently keep a balance on my card with a 13.24% interest rate (it’s got good rewards), but over the next few months I could see myself not being able to pay everything off completely. Do you think it’s not even worth it to try to lower it now?

  3. Gabriel says:

    Nice post. I haven’t had a credit card long enough to get into debt, but posts like these always remind me to be aware of my spending. Thanks for the thoughtfully considered advice.

  4. Aya @ thrive says:

    Great post. We’ve also tailored our own script that people can use when they call up companies. Most people are just too nervous about calling because they don’t know what to say, and that shouldn’t stop them anymore!

  5. This is an excellent post, Trent. I like how you wrote it in an easy 1-2-3 way of proceeding. You pay attention to details that help us.

    Your posts are always consistent in displaying courtesy to others in all forms of communication, regardless of the outcome. As I listen to the way people treat cashiers, tellers, and checkout clerks it makes me wonder if being respectful is even taught in most homes now.

  6. liv says:

    Yeah, I thought about Ramit too the second I saw this posting.

    Either way though, it’s not a bad idea. My interest rates are fine for now, but I’ll need to keep track of any sudden jumps.

  7. Peter Owen says:

    Great tips… also beware of the credit card companies sending out policy changes in the mail which include interest rate changes, minimum fees, credit limits, etc. in this economy. I’ve gotten one or two already.

  8. I think it is time to try this. My Citi Cashback card started at 9.99%, I just noticed the other day when I was doing the budget on the computer that the rate has gone up to 29.99%. That’s crazy! I guess they’re looking to make money any way they can.

    Luckily, we are in a position where we can pay off our balance in full each month so it doesn’t affect us too much. However, I will put it on my to-do list just in case we ever have to carry a balance.

  9. angie says:

    I think these tips may have been more useful a year ago. Given the current conditions, credit card companies have been more than willing to let customers go rather than dropping rates. Witness AmEx actually paying some customers to close their accounts.

    In my own experience, I was one of the lucky Citibank customers who recently got a notice that my interest rate was jumping to 24.99% (I have had the card for more than 10 years, never had a late payment, etc)—simply because they needed to make up some money and they arbitrarily chose people who hadn’t had a rate increase in more than 2 years. When I called about the opt-out, they didn’t even bother trying to persuade me as they might have done several years ago. So now I either get to choose to keep a card with a terrible interest rate, or I cancel my oldest credit card and take the hit on my credit report. Sigh.

    P.S. Let me preempt those commenters who will say “If you don’t carry a balance, it doesn’t matter what your interest rate is.” I know, I know. Lesson learned.

  10. J Brown says:

    I have tried this in the past 6 months without any luck. I am going to go with Plan B. Move the balance to a different line of credit with a lower rate.

  11. adriana says:

    I read in the MSN message boards that a woman called and did precisely this and her account got “FROZEN” because the customer service rep thought she needed credit counseling so instead they froze her account and referred her to an agency.

  12. MiaPita says:

    I have no credit cards (because we had problems in the past), but have a huge amount of student debt owed to the government. I would like them to lower that interest rate from 8%. The best they offer is a 1/4 percent for auto-deduct payments. Is there a way to do this? My loans are all pre 2001

  13. Roger says:

    Not a bad set of steps. Luckily, I’ve managed to avoid taking on any credit card debt, but still an effective method of cutting down your payments.

  14. PF says:

    We haven’t had balances for years. Last summer we were approved to modify our HELOC to add faux stone (a subdivision requirement) to the outside of our home. We, (doh!) bought the stone and materials and then the bank appraised our house at 400K less than they had just 5 months before. So, all of a sudden we had a huge credit card balance. I called the credit card to lower the rate and they wouldn’t budge. I told them by being greedy they’re would lose my business; they didn’t care.

    I thought about playing the balance transfer game with other credit cards and 0% offers, but like someone else mentioned, I already got a notice in the mail that the rates on one of our other cards is going up for no reason.

    We got a loan from the credit union (7%). It is a fixed amount and a fixed payment every month. Back in the day, lowering your interest rate might work, but these days they’ll probably just raise it next month to rates that should be illegal. I’d recommend getting a fixed loan. In this case, this loan *should* be tied to the house because that was what it was for and it increased the value of the home.

    We should have never bought the stone, but we had no reason to suspect that our house would be given a ridiculous and unfair appraisal. Still…what were we thinking? Oh well, live and learn.

  15. PF says:

    I wrote a bla bla bla post above, but didn’t really convey much!

    Having just gone through this, I’m sorry Trent, but your advise may not apply. The rules have changed.

    Get a fixed rate loan through a credit union. The credit card playing field is like a field of shifting sand. What applied last week doesn’t seem to be true this week. People with great credit (we are over 800) are having our rates raised to 20+ percent even though we’ve never been late on anything. Get out if you can.

  16. My girlfriend’s interest rate was recently jacked up for no reason by nearly double. She hadn’t been late, or missed a payment. When she called she was told that the economy was the reason for the rate increase and that she could choose to close the account and return to the old interest rate or accept the higher rate. She was able to talk them down for a temporary period of time, but that rate will increase again after 9 months.

    Given the current economical situation, it may prove more difficult to get a rate reduced, but it is definately worth the phone call.

  17. tightwadfan says:

    I’ve never been in this situation. My first thought on reading the post was to wonder if this technique would still apply in today’s financial crisis. I wonder if the “leverage” you speak of has disappeared, and a card company would now rather do without your business. From the anecdotal evidence of other commenters, it looks like your plan might no longer work.

  18. tightwadfan says:

    Trent, it looks like it’s a good thing you started your financial turnaround back when credit was still easy to get. If you were in the same boat today you might be completely screwed.

  19. oneofnine says:

    Thanks for this post. I have a significant amount of credit card debt on several different cards with rates hovering between 15% and 29%. I hadn’t even considered getting a small loan from my credit union; that would certainly save a huge amount of money for us.

    Thanks again!

  20. Jennifer says:

    I’m not sure the same rules apply any more either – I’ve been reading a lot of anecdotal stories online lately from people with a lot of debt. They call to get the rates reduced and they are flagged as being “at risk” and end up having their credit limits lowered, which sometimes puts them OVER their credit limit and the default APR kicks in. Which makes no sense to me because it seems to just push people into default who are currently meeting at least the min. monthly obligations. Frankly, I’m too scared to try this method right now – I want to fly under the radar with my relatively decent APR and pay things off as quickly as possible.

  21. MK says:

    Like others have said above, considering the current economy, this course of action may not work out so well for some, but really people, it’s worth a shot! what is the worst that the credit card company can say to you? “No”?!? and where does that yet you? right where you were before you made the call. But what if they say “yes”? Then you have something positive come out of that single phone call. And for those with multiple balances on different cards. If one card says no, don’t quit there. Call each and every single one of your cards. Just because one company says no, doen’t mean the other ones will follow suit!

  22. Tim says:

    Actually, the worst thing that can happen is that they lower your credit limit to just above what you currently owe on the card.

  23. CathyG says:

    And to the folks that are getting the message to close the card at the old rate – maybe that is a good option. Do they let you continue to pay monthly in that case or do you have to pay off the whole balance all at once? If you can keep paying at the old rate with a balance that won’t keep increasing, that could be one of the items in your debt snowball with a target for paying it off.

    I think step 4 of this plan was not emphasized enough – along with ‘learning to live below your means’, you need to STOP adding new charges while you focus on paying it down.

  24. JBL says:


    If you never carry a monthly balance, why would it matter what the rate is? My wife and I always pay off the bill in full every month because we never purchase anything that we can’t pay cash for. The card is just a way to get freebies.

    So I am wondering: does a high interest rate affect your credit, or some other semi-opaque financial matter? If it does, I’ll use the script. If it doesn’t, why bother?


  25. Laura says:

    Hello Trent, I’m a frequent reader, first time commentor. Today I prepped myself for battle with my credit company – I hold a high balance at 18.99%. I just called my credit company and followed your guidelines, and they were able to IMMEDIATELY reduce my interest rate to 11.24%. Thank you so much for your tips, they have always been beneficial to me. I’m in a great mood now!

  26. Erin says:

    I’m one of those folks who doesn’t tend to carry a balance. But, while unemployed a few months ago, I decided to cover my bases and see if I could get lower rates _before_ I started carrying balances. (I never did have to, by the way.) And I had no problem getting two different credit cards to lower my rate even though I didn’t have an active balance. So, yeah… I don’t think there’s any reason not to call and ask, even if you don’t “have leverage”.

    By the way… I like the ‘fixed loan to pay off credit’ option. I have some friends I’ve been trying to sell on that idea.

  27. Helix says:

    If your credit score is good you could try Lending Club. I’ve seen 8-9% rates on loans (but again, you must have good credit), and they’re fixed payments for three years. I believe you can pay in full after six months, but not sooner. I’ve never borrowed through it but I have done some lending there; the web site is quite user friendly (from a lender’s perspective, at any rate).

  28. Diane says:

    Cathy G. – If you get a notice to “reject changes to your interest rate” by closing the account, you will still be able to pay the balance off monthly. You have to decide whether you need the card enough to keep it open.

    It will have a negative impact on your credit score to close an older account (long credit history) & also if closing an account will mean you have much less credit available (compared to what is used).

    Things have changed, and it is not as easy to get credit card companies to work with you as it was in the past. I was fortunate to pay down my debt before the credit crunch, and I have not seen much negative impact on my interest rates.

    In the past I have had success with requesting reduced interest rates & removal of annual fees, but is more difficult now. It is still worth asking though…

    Most people I know who carry large balances have had their interest rates increased by several cards, with no recourse except to close the account & pay it off over time at the old rate. And the low interest balance transfer offers seem to have evaporated for the most part.

    READ all notices from your credit card companies carefully so you don’t miss something important!

    And I would stop charging anything that cannot be paid for when the bill arrives.

  29. Allen S. says:

    I recently received a letter increasing my credit card rate to 17.9 percent. I carry no balance so I canceled the card. It is absurd when bank interest rates are at an all time low and the only ones not laying people off are the credit card companies and then squeezing the people who can least afford it. Sorry it just made me angry.

  30. Lindsay says:

    I had my husband do this for his cards today. We have been debt snowballing, and hadn’t seen a decrease in the interest rate.

    Using your script:

    Citi lowered his 29% rate to 8.9%
    Amex lowered his 27% rate to 13%

    I’d say that’s pretty good! Thanks for giving me something that I could just email him and say, “Can you do this while you’re off today?” :)

  31. Sam says:

    I called Citi and lowered my interest rate from 18.99 to 12.something.
    Not as much as some, but I wasn’t carrying a balance on my card.

  32. Matt says:

    I used this system to get my Discover card down from 25% to 13%, sweet. I just used Discover’s online secure message system and a day later they lowered my interest rate. No phone calls, no hassle. Love it.

  33. Solid post!

    I highly recommend scripting your phone calls– write down the bullet points you need to hit so you don’t lose your composure.

  34. Melanie J says:

    kind of related…I have a credit card I keep with no balance just for emergencies, but haven’t used it in 6 months. Just checked it to make sure noone was messing with it and the interest rate was 299.67% I called because, clearly this was a mistake. Oh no. Turns out, since I made no payments in 6 months (even though there’s no balance) they kept jacking the rate. I cancelled the card immediately. Can you imagine if I’d not been paying on a balance because of a financial emergency? Has this happened to anyone else? Ps, avoid Bank of America…

  35. Ginger says:

    I NEVER give them a rate I want. I just call them and ask them to decrease it. On my higher interest cards I would tell them that but that was it. And almost always, I was able to get the interest reduced, btw this was never with a balance on the cards.

  36. dem says:

    Just want to thank you for motivating me to take action… At the beginning of the year, I review our debt and started paying down/off the smaller ones. I’ve got one big one left which has a 24.99% rate. I just got off the phone. I spent 15 minutes with a very nice woman who was just doing her job, and like you said, she said, ‘no’… I waited a few minutes for her to get her supervisor and when all was said and done, they reduced my rate 4%. Based on my current balance, I save about $52 next month. Not bad for 31 minutes worth of work. Calculate what I save over the next 12 months and I figure I just ‘made’ a few hundred dollars per hour. Thanks again…

  37. Jake says:

    A few years back, I was working with a stock trading coach and one of the benefits he offered was coaching me through this. We both got on the phone and called US Bank, Bank of America, Chase, and Washington Mutual.

    He said “Hi, my name is and I am working with my client to improve his credit. I wanted to know if you have any 0% promotional rates available at this time.”

    Bank of America, US Bank, and Chase all gave me 0% for one year. Washington Mutual said “uh, we don’t do that for our customers.”

    I promptly paid off Washington Mutual and never used that card again. After two years they reduced my credit line to $0. I couldn’t have cared less.

  38. Renee says:

    I have several high interest cards with high balances totaling 10k. I recently made a few calls to Capital One, CitiBank, HSBC, and Chase. Try a script that includes the word, “Bankruptcy”. Tell them you are in the last stage of your bankruptcy counseling (legally mandated now) and if they cannot lower your interest rate drastically, then you’s like to get the department that will be handling your discharge claim. Especially if you are not in a position to threaten to transfer the balance to another card or if you have a low credit score. I promise you they become helpful very quickly. (Chase was the only one that wasn’t very helpful-granted I had the highest balance with them, I will try in a couple months when my other balances go down more.)

  39. Mike says:

    The biggest problem, is the economy. Citi jacked my interest rate from 13 to 29 because my payment was1 day late. No talking to anyone helped. Also if you are forced to talk to India, Brazil, The Philippines and other foreign based csr. You have no chance, or they will make matters once for you. Try to call Macy’s credit services. What ever problem you have they will make it worst.

  40. Amanda says:

    After reading all these comments, and some specific to BoA on other websites, I had mixed feelings about calling Bank of America and asking for a lower credit card interest rate. However, I sucked it up, wrote out a script, and called. It took me less than 5 minutes to get my rate lowered from 27% to 12%, and I didn’t even have to bargain or threaten to leave BoA. I just called and asked to speak with someone who could help me lower my interest rate, if possible (I was in the default zone of interest rates at 27% b/c my payment last month posted 1 day late). I was transferred, spoke to a very nice guy, and he immediately said, “yeah, I think we can lower this to 12.24%, no problem.”

    So while I know there are risks nowadays to calling, I still think it’s worth a shot. Good luck to everyone!

  41. pat says:

    i called my credit card companies and lhey refused to lower the rate and offered to close my account. i need one for emergencies but payments are so high now i am bogged down. any advice?

  42. Paul Tree says:


    That is the bottom line. The Consumer Credit protection bill that went through Congress was preempted by the credit companies raising rates on most cardholders. Now when you call them, they refuse to lower your rate. I have tried.

    I used to have a 12.9% rate and they increased it to 29.9% for no reason other than that the new protection bill does not allow them to arbitrarily do that, so they did before it passed.

    There are scoundrels and there are credit card companies, and given a choice, I’d rather keep the company of scoundrels.

  43. Kristi says:

    Like many of the other people who have posted, I have also been hit with outrageous increases in APR, for NO reason (except for the reason Paul Tree gave with the new protection bill). I will say, the protection bill may have hurt me more than it helped.

    I tried calling Chase today to do this.. they refuse to bring down ANY of my APRs. I had a “change in terms” they said where my rates went from 8.99% to 19.24%, and they will not do anything because I accepted the terms of the agreement by not canceling my card before the change of terms were set.

    Chase would rather me cancel every card I have with them, than keep me as a customer (sadly they have my longest standing card which I want to cancel but feel it would be a bad idea.)

  44. PJ says:

    What happened to basic economics? If everyone that has no balance cancled their cards and those with a balance wiped them then cancled their cards how will the credit card companies afford to stay in business. They will be forced to lower their rates or go bankrupt.
    Yes it will take a bit more planning to pay everything with cash but those of us that are smart dont carry any major balances on cards anyway.

  45. JG says:

    My wife had a $12k balance on her card with a 240/month payment. She contacted a debt management company who wanted to charge a fortune. She just picked up the phone and called her credit card company and said that we’re having hard times, and that we won’t be able to make the payment anymore, and we’re being proactive in looking for a resolution before turning the card over to a debt management firm. The credit card company lowered her interest rate from 23.99% to 6%!!! They closed the account, so she can’t use the card anymore, but reflected it on her credit report as self closed. NOW is the time to do this. Everyone is walking away from their debt, so the companies are willing to work with people.

  46. KD says:

    I just gave this a shot with my credit union. I’ve had the card for 9 1/2 years, the interest rate is 14.99%. They told me that they do not have the ability to lower interest rates until February because they changed their policy and froze their rates due to the changes by the government recently. Is this just a bunch of crap or what?

  47. Amanda says:

    Hello all. I tried to make a call and do some negotiating. I didn’t get very far. I’m a bit of a pushover. They told me over the phone I have a variable APR and there’s nothing they can do to change it. If you have a variable APR, does that mean it can’t be adjusted? Or did I just give up too soon?

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