Want a lower credit card interest rate? Just ask

If you have a credit card, you have a relationship with your card issuer. Your card issuer values that relationship and wants to keep it. There are many types of offers your issuer can make to ensure you stay (and don’t default on your debt), but it won’t advertise them — since they don’t exactly make the banks more money. It’s like a secret menu. You have to know to ask.

Lowering your credit card interest rate is one of such offers. 

If you’re unhappy with your credit card’s annual percentage rate (APR) or you’re struggling to pay down your card debt, securing a lower rate may be as simple as asking your credit card issuer. There’s no guarantee it will grant your request, but you won’t know until you make it. 

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.

1. 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 premium credit card, so make sure the cards you are comparing match your own.

2. 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.

3. Consider 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 about a hardship program: If you’re struggling with your credit card balance, and your situation doesn’t exactly provide you with much leverage, ask about your issuer’s hardship program. This is another “secret menu” item aimed to help you stay current in a difficult financial situation (and to allow you to remain a customer, of course). For instance, the issuer might offer you temporary rate reduction to help you catch up on your payments.
• 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.

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. Remember: you can always ask before you make the request.

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, then a hard inquiry is likely. In this case, you’re likely to see a small score decrease. Hard inquiries impact your scores for one year and disappear from your credit reports after two years.

Alternative options to consider if you’re denied

If you aren’t able to get your interest rate changed, there are other avenues you can take to pay less in interest.

• Balance transfer

  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% 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% APR for free.

• Paused spending

  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. The lower your balance, the lower the interest charges. Once you have paid off your balance in full, you can start using your card for everyday purchases again.

• Credit counseling

  If your credit card debt has become overwhelming, and your card issuer hasn’t offered any helpful solutions when you reached out, consider credit counseling. These non-profit agencies can help you come up with the right strategy and connect with your credit card company on your behalf.

The bottom line

It’s not guaranteed you’ll get a lower credit card APR simply by asking for it, 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 and paying your credit card bill on time and in full every month.

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 transfer your balance over to a new 0% APR credit card or seek credit counseling, instead.