How to negotiate a lower credit card interest rate
If your credit card has a high interest rate, you may be able to do something about it – with a little luck and a few simple negotiating skills.
CreditCards.com commissioned a poll asking 1,000 credit card holders whether they’d ever negotiated for a lower credit card APR (Annual Percentage Rate). Only 23 percent of the cardholders we asked had ever asked for an interest rate reduction. But of those who did, two out of three scored a lower rate.
The bottom line? It pays to negotiate. We got one credit card user to help us read through a negotiating script that’s available on CreditCards.com.
Tony Rodriguez, credit card user: I’ve never done it, but I have called and talked to customer service and when I asked them they just made it seem like it wasn’t going to happen.
Kristin Wong, Creditcards.com: Are you willing to try it again today?
Rodriguez: Yeah, absolutely.
Wong: Ok, me too! Let’s get started.
Once you have a customer service representative on the phone, tell them your name and your customer history.
Rodriguez: My name is Tony, and I’ve been a Chase card customer for over 10 years. I feel like I’ve been a good customer, and I would like to lower my interest rate. Do you have the authority to do that?
After stating your name and your case, at this point, the representative will likely say, no. In that case, simply ask for a supervisor.
Rodriguez: Is there any way I can talk to a supervisor?
Once you have a supervisor on the line, you’re ready to name your rate.
Rodriguez: My interest rate is just a little bit high I was wondering if there was any way we can get it down to 10 percent?
If they decline, ask if they have a different rate in mind.
Rodriguez: Is there another rate we can work out?
If they say no, you could ask to close your account. But you should only do that if you’re ready to follow through.
Rodriguez: OK, in that case I’d like to close my account and finish off paying my balance under the old terms.
Be aware that when you close accounts, it increases your credit utilization ratio, which accounts for 30 percent of your credit score. Your credit utilization is the percentage of available credit that you’re using.
Tony didn’t have any luck lowering his score. But let’s see how it worked for me:
Wong: I’ve been a Capital One customer for a few years now and I feel like I’ve been a good customer. And I just wanted to see if I could lower my interest rate. Do you have the authority to do that?
Wong (responding to representative’s offer): 12 percent for the next seven months? Could you go to 10 percent?
Wong (responding): OK, so right now you said I was at 16 percent variable but you could do 12 percent for the next, I’m sorry how many months was it? — OK, that would be great. Bye.
Wong: So, Capital One, I didn’t even have to ask for a supervisor or anything. In fact they offered to just lower my rate. That was really easy. All I had to do was call and basically ask if he had the authority to lower my interest rate. And he said “Yeah, sure. In fact here is what I can lower it to.” I tried to counteroffer with an even lower rate and he said no. But the point is, I called and I asked and I actually got a lower rate and it was really easy.
Wong (to Rodriguez): That wasn’t fair!
Rodriguez : I know.
Wong: They said something about – “That’s been your interest rate from the beginning.” So maybe if they hiked it up, you could call back and negotiate with them, lowering it down to what it was or something.
Wong: Are you going to try it again in six months?
Rodriguez: Yeah I’m always going to keep trying. It’s worth a shot.
When it comes to haggling over your interest rate, it doesn’t hurt to ask. Kristin Wong, CreditCards.com.