How to Lower Your Credit Card Interest Rate

With credit card interest rates on the rise, you may be wondering how to lower your credit card interest rate, or if it’s even a possibility.  

The interest rates of many popular credit cards are now hovering close to 30%. According to this Forbes article, the average credit card balance in 2022 was roughly $6,000. 

Taking that balance and pairing it with a 28% interest rate would take you ten years to pay off that card if you made a payment of $149 each month, but if you can whittle the rate down to just 8%, you can pay off the card in four years with the same payment amount. 

Here are some things you can try to lower your credit card interest rate and pay off your debt faster.

1. Negotiate a Lower Interest Rate on Your Credit Card

You might be able to get a lower interest rate on your credit card by calling your credit card company and asking. Here are some tips to help you as you negotiate.

Know Your Position

Understanding your position before you make the call to your credit card company is important. More specifically, what is your credit score, and what other offers have you found that guarantee you a lower interest rate?

A good credit score and in-hand offers from other credit card companies will put you in a position of strength.

Similarly, having a long history of a good track record with the credit card company may give you some leverage.

The better position you are in to secure a better offer from another credit card company, the more leverage you have with your current credit card company when it comes to convincing them to lower your current interest rate. 

Understand the Bank’s Position

Knowing the bank’s position is just as important as knowing your own position when it comes to credit card negotiations. 

“If you know the enemy and know yourself, you need not fear a hundred battles.”

Sun Tzu, The Art of War

When it comes to knowing your “enemy” in credit card interest rate negotiations, always remember that the bank’s position is twofold:

1. They are in the business of making money
2. Customer retention is important for business.

If the terms you’re seeking will jeopardize either of those two goals, you reduce your chances of getting a lower interest rate.

This is why knowing what to say when you call to lower your credit card interest rate is important.  

Know What to Say on the Call

When you call to try and get a lower interest rate on your credit card, it’s important to be firm but polite.

Explain to the customer service representative that you’ve gotten numerous other offers for cards with lower rates but that you’d rather stay with their company. 

Ask the representative who you can talk to about lowering your rate. Remind them that you’ve been a long-term customer and paid your bills on time (If that’s not the case, you’ve likely lost some of your bargaining power). 

If you’ve got a good credit score, a stable history with the credit card company, and better credit card offers in hand, there’s a good chance the customer service rep will grant your request for a lower interest rate.

But what happens if your request is denied?

What to Do if You’re Denied

If your request for a lower interest rate is denied, ask why. From there, ask politely to speak to a supervisor.

Ask for the customer service rep’s full name and employee number if you’re not having any luck getting transferred to a supervisor. 

If you don’t have any luck with the supervisor, search online for the company’s CEO or customer service VP, or call the customer service center again and talk to someone else. 

If all of your efforts come up short, it might be time to try a balance transfer.

2. Get a 0% Balance Transfer

If you’ve got a good credit score and solid on-time payment history, zero percent interest balance transfer offers should be abundant. 

In fact, you probably get at least one in the mail every week. If not, you can surely find one online.

Note that zero percent interest balance transfers are usually limited to a specified time period, such as 12 months.

Also, these offers often come with a fee for transferring balances. However, the fee is usually less than what you’d pay if you stayed with your current card company.

If not, you may want to rethink your decision to transfer your balance to another card. 

Where to Find a Balance Transfer Card Offer

As mentioned earlier, if you’ve got good credit, you’re probably getting regular zero-percent balance transfer offers in the mail.

So instead of throwing those credit card offers straight in the trash, look them over to see if there’s a deal you should take advantage of. 

Another way to find a good zero percent balance transfer offer is to check online. This article lists a few of the best credit card bonus offers.

Many times the offers include zero percent transfer features as well. The best travel card offers sometimes feature zero percent transfer features too. 

If all else fails, you can always do an internet search for the best balance transfer cards. Another option is to get help from an outside service.

3. Get Help From an Outside Service

Representatives from outside services may have better luck negotiating for a lower credit card interest rate when your personal efforts fail.

For instance, debt relief companies can help you lower your interest rates and pay off your debt faster. Just be sure the debt relief companies you’re considering have high Better Business Bureau ratings and low fees.

Another option would be to use Tally to pay off your credit cards faster. Tally is an app that helps you pay your debt off faster.

The app offers you a line of credit and consolidates your payments, making one easy payment  on your behalf each month.

In the event that Tally’s line of credit interest rate is lower than what you’re currently paying on your credit cards, you may want to use your Tally account to consolidate credit card debt.

If you can get a lower interest rate with Tally, you can use the savings to pay your debt off faster. 

Read our Tally review for more information about how Tally works. 

4. Search for an Alternative Solution

Here are some other options for lowering your credit card interest rate and/or paying the debt down faster to save money.

Obtain a Personal Loan at a Lower Rate

Getting a personal loan with a lower interest rate can be a smart way to pay less interest on your credit card debt. Depending on your individual credit situation and the loan that you find, a personal loan can save you money if you get the right loan. 

Budget to Pay the Card Down Quickly

Another option to save money on credit card interest is to design your budget in a way that helps you pay down your credit card(s) quickly. 

There are several great budgeting software programs and apps to help you get your budget on track. 

If you’re an envelope budgeter who wants to move into a digital world, you can check out these e-envelope systems like Mvelopes. 

And for old school spreadsheet lovers like myself, you can always take advantage of one of the best printable budget worksheets.

Note: I’ve found that a zero-based budget is a most effective way of maximizing your earnings. Learn more about zero-based budgets and get free templates here.  

Side Hustle to Get the Card Paid Off Fast

Last but not least, starting a side hustle can help you save interest by allowing you to pay down your credit card more quickly.

Finding the perfect side hustle for you is easy. If you’re feeling really motivated, try a side hustle stack to multiply your earnings.

Whether it’s working as a restaurant server at night, working as a rideshare driver on weekends or finding side hustles you can work from home, there’s always ways to bring more income into your life. 

Final Thoughts

Paying credit card interest is akin to tossing money out the window. Knowing how to lower your credit card interest rate can save you hundreds or even thousands of dollars in interest payments. 

Use your negotiating skills and the tips above to get a lower rate on your credit card. If the bank fails to deliver, consider what steps you’ll take next to save money on credit card interest. 

From zero percent interest balance transfers to a side hustle stack, you have options for saving money on credit card interest charges.