Lowering Your Interest Rate With a Simple Phone Call

Lower credit card interest rate1

Did you know that a study conducted in 2002 showed that more than 50 percent of participants who simply asked for a lower interest rate on their existing cards were given one?2

We’re in a harsher economy these days, but we believe every person dealing with credit card debt should request a lower APR. The potential savings of a well-worded phone call are worth the effort.

Follow this guide to prepare yourself for your calls. And don’t forget to try ReadyForZero, a free tool for helping you pay off all your debt.

Preparation

  • Research
    The more you know, the more power you have to negotiate. Know how your APR is calculated (this generally involves reading extremely fine print). Often, it’s pegged to the prime rate, plus or minus a percentage. Credit card companies don’t always update your APR when the prime rate goes down, so it may be out of date. Know what your APR is, what it should be, and what you want to ask for ahead of time.
  • History
    Know your history with a company. Find the cards for which you have been a customer for a long time and have made your payments on time. You have more negotiating power with these.
  • Schedule Time
    These phone calls can be time-consuming as the customer service departments place you on hold. Make sure you have 20 minutes free and are comfortable with smooth jazz.
  • Phone Numbers
    Phone numbers for customer service departments can be found on the back of each credit card.

During the Call

  • Ensure you’re talking to the right person
    Ask the representative if they are able to work with interest rates. Often, you will have to be escalated to a supervisor, who has more power to help you.
  • Introduce yourself as a good customer
    Detail your history with the company.
  • State your case
    Tell the representative that your interest rate is too high and you would like it lowered. Explain your financial situation and why this is important.
  • Sell it
    Mention that you are considering transferring your balance to a lower interest card or paying it off with a consolidation loan, and want to give them the chance to keep you as a customer. Credit card companies compete fiercely to get and keep customers, and the loss of your business is the most valuable negotiating leverage that you have.
  • Be polite and assertive
    Lost tempers will only get you tears and hang-ups. Remain calm and confident.
  • If they won’t budge
    Often, the representative simply can’t change your APR. If this is the case, ask them how long it will be before your APR can be negotiated again.
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After

  • If successful
    Celebrate! You just saved yourself a bundle. Leave a comment letting others know of your success.
  • If not
    Set a reminder to call again in six months, or whenever the rep said they would negotiate again. (ReadyForZero automatically reminds you to call your credit card companies periodically).

This article is part of our Credit Card Debt Resource Center.  If you’re looking for additional information about credit card debt, be sure to pay a visit!

  1. Image source: http://www.flickr.com/photos/plenty/3360322975/in/photostream/ []
  2. http://www.uspirg.org/newsroom/financial/financial-privacy–security-news/consumers-save-thousands-by-calling-credit-card-company []

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  • Josh

    Just called Citibank, they lowered my interest rate my APR by 3.5 percentage points. Thanks for the tip!

    • http://twitter.com/innovatebig Rod Ebrahimi

      that’s great! thanks for the update.

  • Josh

    Just called Citibank, they lowered my interest rate my APR by 3.5 percentage points. Thanks for the tip!

    • http://twitter.com/innovatebig Rod Ebrahimi

      that’s great! thanks for the update.

  • Mark

    Thank you for the “script.” I called Sears and got my interest lowered by about 5 points.

  • Mark

    Thank you for the “script.” I called Sears and got my interest lowered by about 5 points.

  • Sarah

    How am I supposed to sell “that you are considering transferring your balance to a lower interest card or paying it off with a consolidation loan” when it’s a lie?

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Hi Sarah, I think the idea is to tell them that you’re looking around for lower rates and are willing to switch to another company if necessary to get those lower rates.

  • Lisa Kovac

    You need a “like” button! :-)

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Thanks, Lisa! We do have a “like” button right at the top of the post. :)

  • Paco

    this trick has NEVER worked for me. Banks must hate minorities.

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      Hey Paco, sorry to hear that! Unfortunately, they don’t always decide to work with you. I hope you have success using this trick in the future.