How to Negotiate a Credit Card Rate

Higher credit card rates result in higher minimum payments. But there are ways to get a lower rate. You can negotiate a better rate on your credit card, and sometimes, it's simply a matter of picking up the phone and asking.

Difficulty: Moderate

Instructions

1. Clean up your credit history. You won't qualify for a reduced interest rate with a bad credit history. Take steps to improve your rating before requesting a reduction. Pay your creditors on time and keep your outstanding balances low.

2. Contact the credit card company. Some companies periodically review client files and occasionally initiate interest rate reductions. If this doesn't happen, contact your credit card company and ask to speak with a customer representative.

3. Highlight your history with the credit card company. Once on the phone with a customer service rep, mention your excellent payment history with the company and request a permanent lower interest rate.

4. If you're turned down for a permanent rate reduction, ask for a temporary rate reduction, wherein the company would lower your rate for a specific period -- typically six to 12 months.

5. Find another credit card company. If the company won't lower your rate, threaten to cancel the card. Credit card companies want your business, and this move might make them reconsider.

Tips & Warnings

• Consider a balance transfer. Apply for a low-interest rate credit card, and then transfer your high-interest balances to the new card. You'll enjoy a lower rate and lower minimum payments.
• Credit card interest rate reductions are generally temporary, and are subject to a good payment history with your creditors. Developing bad credit or missing a payment can result in an immediate rate increase.

References

• Bankrate: Want a Lower Rate?
• Negotiating Lower Rates