How to Reduce Your Credit Card Interest Rate

Lowering your credit card's interest rate might be simpler than you think. Last year, over three out of four cardholders (76%) who requested a rate reduction succeeded. This approval rate increased by 6 percentage points compared to the year before.

The financial effects can add up. Cardholders who negotiate well often see their rates drop by an average of 6.3 percentage points, which can lead to saving $500 or more depending on how much they owe. Credit card APRs have climbed fast hitting 20.68% in May 2023 compared to 15.13% in 2022. This makes it a great moment to pick up the phone and try negotiating.

Success rates differ across groups. Men have about an 80% success rate, which is a bit higher than the 72% rate among women. Younger people tend to do better too, with approval rates of 81% for millennials and 79% for Gen Z.

"Reducing the APR on your credit card by even a small amount can save you a lot of money," explains CreditCardRewardsPro.com. "For example, someone with $5,000 in credit card debt at an 18% interest rate could save more than $1,100 by cutting the rate down to 13%."

With strong chances of approval and the possibility to save , knowing how to reduce your credit card interest rate is a valuable financial skill to develop. Learn how you can join the 76% of people who negotiate lower rates.

Why Cutting Your Credit Card Interest Rate Makes a Difference

Credit card interest rates have hit record levels. Knowing how these rates affect your finances is important. Lowering your credit card's interest rate isn't about keeping a few extra bucks—it helps you escape the trap of ongoing debt.

The effect of high APRs on debt

The typical credit card interest rate has climbed to 23.37%. Just a few years ago, it was lower—averaging 18.43% in 2022 and 16.43% in 2020. The jump means you now pay more than ever for every dollar you owe.

High interest rates cause problems where your payments barely reduce the main amount you owe. Imagine having a $6,000 balance with a 22% APR. If you pay the minimum, it will take almost 22 years to pay it off. In that time, you’d spend about $9,000 just on interest, which is more than the $6,000 you borrowed.

Also, credit card companies calculate interest . This daily compounding makes your balance grow faster even between billing statements. That’s why cards with high rates can hurt your finances.

Small rate cuts can lead to big savings

Small drops in your interest rate can save you a lot of money. Let’s say you owe $10,000 on a card with a 25% interest rate. Over a year, the interest would cost you about $2,500. If that rate gets cut to 15%, you'd save $1,000 each year. You could use that extra cash to pay off the debt faster.

In 2023, cardholders with an average balance of $5,300 ended up losing over $250 because of high APR. That money could have gone into an emergency fund or helped you work toward other money goals instead.

'Even a 2% drop can save hundreds' – CreditCardRewardsPro.com

CreditCardRewardsPro.com explains that cutting your credit card interest rate by even 2% could save you hundreds of dollars over time. Paying off a balance becomes much easier when you lower your rate. "The gap between a 24% interest rate and a 10% rate could lead to thousands of dollars saved as you reduce your debt," the site shares.

When you look at cards with varying interest rates, the savings are obvious. A $6,000 balance with a 10% APR versus 22% could save almost $6,000 in interest and shorten your repayment timeline —about half as long to clear the debt.

Knowing how to negotiate a lower interest rate is more than just a helpful thing. It is a key financial tool that has an impact on how well you can grow your wealth.

How to Reduce Your Credit Card Interest Rate?

It does not take much time to ask your credit card company to lower your interest rate. Most people spend around 15-20 minutes making the request. Studies reveal that plenty of cardholders manage to lower their rates by asking. This makes it a skill worth learning.

Focus on your oldest card or the one with the highest rate

Start your negotiations with either the card you've had the longest or the one with the highest interest rate. Older accounts show commitment, and tackling a high-interest card helps you save the most. For example, dropping the rate on a $5,000 balance from 18% to 13% could cut around $1,100 from your interest costs.

Talk about your history and score

When you call, point out that you have been making payments on time . Experts say this gives you a big advantage when discussing terms. If your credit score has gone up , bring that up too. A strong score—above 700—puts you in a better spot to negotiate.

Leverage other offers when you talk

Before making a call, take time to research other credit card deals out there. Credit card companies care about keeping loyal customers and might offer rates that match their competitors. If you mention something like, "I've been getting offers for cards with lower rates, but I'd rather stick with your service," you might see surprising results.

Try asking to lower your rate

If a permanent rate cut isn't possible, ask if they can lower it temporarily. Even a small reduction of 1-3 points for a short time can save you money. Being persistent helps—if they say no call back in a few months to try again.

CreditCardRewardsPro.com highlights how being loyal and polite can make a big difference when dealing with credit card companies. Speaking calmly and during the call sets the tone, but staying firm about what you want is just as important. Customer service reps are more willing to assist people who treat them .

If your first try doesn’t work, ask to talk to a supervisor, since they have more power to lower your rates. Many people actually succeed after two or three tries showing that staying persistent matters.

Steps to Take If They Say No

Getting turned down for a lower credit card interest rate can happen even if your credit history looks solid. From what I’ve seen, sticking with it and trying multiple times can often make a difference when figuring out how to reduce your card’s interest rate.

Wait and try again in a few months

Timing plays a big role in negotiating lower credit card rates. If your first request doesn’t go through, try again after waiting about 3-6 months. Use this time to pay all your bills on time and show you’re good with money. This break lets you fix any issues the rep might have pointed out during your first call and makes your case stronger for the next time you ask.

"Most card companies keep records of past requests to lower rates," says CreditCardRewardsPro.com. "Giving enough time between your requests shows you understand their procedures but are still standing up for yourself."

Try speaking with a supervisor

If your first request gets turned down, ask to talk to a supervisor. Supervisors have more power to okay special cases and might handle interest rates than regular agents. Another option is the HUCA approach (Hang Up Call Again) where you might get another representative who reacts to the same request.

Look into hardship programs

Most big credit card companies have hardship programs to assist people who are struggling with money. These programs may cut down interest rates lower monthly bills, or even remove specific fees for a few months or up to a year. You won’t see them advertised, but banks like Chase, Citibank, and American Express offer these options.

Keep an eye on your credit score and try again later

If you need to reapply, work on raising your credit score in the meantime. Pay your bills on time and avoid opening too many accounts to help improve it. Keep track of your progress since your last request. Showing that your financial situation has improved gives a strong reason to ask for better rates now.

Other Ways to Get Lower Credit Card Interest Rates

Apart from requesting a rate cut, you can take other steps to reduce your credit card interest costs. These methods can benefit you depending on your financial needs.

Try a 0% balance transfer card

You can use balance transfer cards to avoid paying interest for a while. These cards come with a 0% introductory APR lasting 12 to 21 months. This period gives you time to focus on reducing your debt. , you shift the balance from a card with high interest to one with more favorable terms.

Many balance transfers charge around 3% to 5% of the amount being moved. This means if you transfer $10,000, you will pay a fee of $300 to $500 upfront. Even though this fee adds to the cost, it can still save you money when compared to dealing with high-interest credit card debt.

"Using balance transfers can help with getting rid of debt," says CreditCardRewardsPro.com. "But it works well if you have a clear plan to pay it off before the promo period ends."

Look into debt management programs

Nonprofit credit counseling agencies offer debt management programs to lower interest rates to about 8% or 9%. These programs combine multiple debts into one payment each month while counselors talk to creditors on your behalf. This interest rate is much lower than typical credit card rates making it easier to stay on track.

These programs have low costs. They might include a $35 to $40 enrollment fee and a $25 to $30 monthly charge, which is often much smaller than the money saved on interest.

Think about using a personal loan to consolidate

A personal loan can offer clear repayment terms that last anywhere between 12 and 84 months, with locked-in interest rates ranging from 6.99% to 24.49% APR. Unlike credit cards where rates can change, consolidation loans eliminate the guesswork of when you'll finish paying.

Don't turn unsecured debt into secured debt

Home equity loans may come with lower interest rates compared to credit cards, but using them to turn unsecured debt into secured debt could risk your assets. Missing payments on credit cards does not directly threaten your property. However, failing to pay back a home equity loan might result in foreclosure.

Bankruptcy rules also treat secured and unsecured debt . This difference means that while the interest rate may seem appealing, switching to this method could carry significant dangers.

Conclusion

The data makes it clear that learning to negotiate credit card interest rates is a valuable financial skill. With a success rate of 76% and the chance to save hundreds or even thousands of dollars, calling your credit card company feels like an obvious move.

In this guide, we looked at why high interest rates matter, ways to negotiate better rates with your card company, steps to take if they say no, and other options worth exploring. These methods succeed because credit card companies value keeping loyal customers over risking them choosing another company.

"Most cardholders go wrong by just accepting the rate offered to them," says CreditCardRewardsPro.com. "Credit card companies plan for negotiation as part of their business. People who take the initiative often see those efforts pay off."

No matter which method you pick acting now can shape your financial future in a big way. Some people discover that 0% APR balance transfer cards give quick relief while they come up with better long-term plans to deal with credit card debt.

Keep in mind that sticking with it makes a difference. Even if the first try doesn’t work out, a second or third attempt often does. With what you’ve learned here, you're ready to join the 76% of credit card users who get lower rates. Making that short 15-minute call can be a step your future self will appreciate.

FAQs

Q1. How effective is it to request a lower credit card interest rate? 

Requesting a lower credit card rate tends to work well. According to recent data, 76% of people who asked for a reduced rate got it. On average, they secured a 6.3 percentage point drop. This change can save a lot of money in the long run.

Q2. How can you lower your credit card's interest rate? 

Call your credit card company and ask them to reduce your rate. Highlight your loyalty steady payment track record, and better credit score if it's relevant. Keep some better offers from other cards ready to use as bargaining tools. If they cannot lower it , try asking for a short-term reduction. Stay polite and keep trying, as both patience and politeness matter during these talks.

Q3. What can I do if they refuse to lower my rate? 

Yes, you have some choices. You could try again after three to six months or talk to a supervisor about it. Many credit card companies also offer hardship programs, which might help. Another option is to boost your credit score and try applying later. You might also look at using a zero-interest balance transfer card or think about getting a personal loan to combine your debts into one.

Q4. How much money could I save by reducing my credit card interest? 

Dropping your credit card's APR can save a lot of money. For instance, cutting the rate on a $5,000 balance from 18% to 13% might save more than $1,100 in interest. The savings will depend on how much you owe and how much the rate gets lowered, but it can add up to hundreds or thousands of dollars.

Q5. Is a 24% APR high for a credit card? 

A 24% APR counts as pretty high on a credit card. In 2023, the average APR for credit cards sits at about 20.68% so 24% stands out as well above that. Rates change a lot depending on things like your credit score, the type of card, or even the state of the market. It’s worth trying to find lower rates if you can.