How to Lower Your Credit Card Interest Rate

by Susan Paige
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Here’s something credit card companies hope you never figure out: Minimum credit card payments are designed specifically to make you take as long as possible to pay off a balance.

Moreover, the higher the interest rate the card carries, the more of that minimum payment goes toward interest rather than reducing the principal. Thus, if you’re ever to have a prayer at paying off a credit card, you must pay more than the minimum each month.

Knowing how to lower your credit card interest rate will help too.

The following steps will help you accomplish just that.

Check Your Credit Report and Score

Any interest decision you ask a card issuer to make will be decided largely upon the basis of your payment history. Having a record of on-time payments will stand you in good stead when you’re seeking an interest rate reduction.

One copy of each of your three credit reports can be acquired for free at Look them over for errors and discrepancies to make sure your score is the best it can be. Credit scores can be had for free as well. Check with your bank or credit union. If they don’t provide them, you can always go to, although you will incur a fee there.

Determine Your Current Rate

You’d be surprised to learn how many people have no idea what the interest rate on their credit card is. Far too many people don’t think about it at all. As of June of 2020, rates ranged from 14.04 to 26.36 percent, depending upon your credit score, according to US News & World Report.

If you’re already at the low end of the spectrum, you can still ask, but don’t be surprised if you’re turned down. Meanwhile, if you’re somewhere in the middle or on the higher end, you have a better shot at it — particularly if your credit score qualifies you for a rate lower than the one you’re currently paying. Anything over 670 will put you in a good bargaining position, assuming you have a debt-to-income ratio of 36 percent or less. In other words, you make 64 percent more than you owe.

Timing Helps Too

Maybe you just paid off your student loan, or made the last payment on your car loan or mortgage. Perhaps you moved to a more affordable place, or lowered your expenses in some other fashion.

All of these actions lower your debt to income ratio. And, the more cash you have after your bills are paid, the more likely the credit card company will want to keep you as a customer.

Before you call, shop around a bit and see what’s out there. You might find a balance transfer card with a lower rate or a credit card consolidation loan with better terms. Use these as leverage in your negotiations.

Ask for an Interest Rate Reduction

Once you’ve done all of the background research listed above — make sure your credit score is good and your debt-to-income ratio is in the right range and you’ve found alternative issuers — then call your current issuer and ask for a reduction.

Be ready to point out the fact you’ve always paid on time, your credit score is good, your outstanding obligations are low and you’ve found better deals. They don’t want to lose your business if you’re a good customer.

Ultimately, knowing how to lower your credit card interest rate is simply a matter of making sure you deserve one and asking for it. It also pays to shop around a bit so you have a better bargaining position — and somewhere to go if your request is denied.


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