What’s the easiest way to lower yearly interest payments on your credit card and save hundreds of dollars? By asking. It’s simple to do, yet people leave money on the table—only half of all cardholders have ever asked their lenders to lower their rates or waive fees, even though 84% of the time it works, according to a CreditCards.com survey.
How much you can save
There are no guarantees that your credit card will approve a decreased interest rate, but the potential savings make it worth trying. Consider this example from Investopedia :
A credit card with a $10,000 balance charged 25% annually will cost you $2,500 in interest over the coming year. If your interest rate on that credit card is lowered from 25% to 15%, this would lead to an annual savings of $1,000, which you could put toward paying down your debt. A lower interest rate can make a huge difference in how long it takes to become debt free.
Prepare before you call your lender
The credit card business is competitive, so your lender will be inclined to lower your rates if you seem like a responsible borrower. At the very least, you want to project an image of someone with a strong understanding of their finances: you should know your interest rate (usually in the top right of your credit card statement), your existing balances, payment history, and credit score. It’s also a good idea to research other low-interest cards, or even better yet have a real offer in your hands, like those pre-approved offers you get in the mail.
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How to make the call
Flip your credit card over and call the number provided. When talking to the lender’s representative, paint a picture of yourself as a borrower that’s responsible but struggling with debt payment at the current interest rate. Be polite, yet firm. Convince your lender that with lower rates you will be able to make consistent payments, otherwise you’ll have to shop around for other cards and consider doing a bank transfer. Being honest about unemployment or other financial difficulties will also help you make your case.
Your lender will be more likely to agree if you have a history of on-time payments and a good credit score (higher than 670). If they tell you they can’t lower your rate, however, don’t argue, just politely ask for their reasons which can help you understand what you have to work on for next time (e.g., there are ways to improve your credit score). At this point, you can also ask for a temporary reprieve, like a one-year rate reduction of 2-3 points, or for your annual fee to be waived.
Even if you aren’t successful, you can wait a few months and try again—it never hurts to ask.
This story was originally published in 2017 and has been updated on November 4, 2020 to update links and include new information.
