4 Super Easy Ways To Negotiate Credit Card Interest Rates

cash credit cards calculator to negotiate credit card interest rates

4 Ways To Negotiate Credit Card Interest Rates

Are your credit card payments too high and you’re dreading needing to negotiate credit card interest rates.  One common misconception credit card holders have is the belief that credit card interest is fixed. Interest rates are the main way banks trap customers in credit card debt. It’s important to note that you don’t have to pay any interest at all if you pay your card balance in full every month.

negotiating rates

In fact, having to negotiate credit card interest rates may seem scary at first, but it isn’t that hard to do. All you need to do is perform a little research beforehand.

Today we’re discussing the different types of interest rates and some tips to help you lower them.

Fixed and Variable Interest Rates

A fixed interest rate is the constant rate of interest you pay on your card. The bank can change the rate if you’re late on payments (more than 60 days), the initial fixed rate was a card promotion, or you completed a debt management program.

Banks must notify you 45 days in advance if they plan on changing your fixed interest charges. As a result, you reserve the right to opt-out of a rate increase by talking to your lender. Opting-out will allow you to pay your balance with the initial fixed interest rate.

Variable interest rates can change anytime based on the economy. In addition, variable rates are dependent on the index rate (prime rate). When the prime rate, a rate managed by the Federal Reserve, increases then your interest rate also rises.

Cardholders with a variable interest rate will not receive advanced notice of a rate increase, nor are they given a choice to opt-out.

It’s important to pay attention to the stock market and news regarding the prime rate.

Let’s look at ways to get lower payments.

one hundred dollar bill puzzle

1. Call Your Credit Card Company

One of the best ways to negotiate your interest rate is by calling your card company. A simple conversation where you list how responsible you’ve been with payments and your loyalty to the company can sway creditors to lower your rate.

2. Paying the Balance off in Full

When you get your credit card statement, your eyes immediately go to the minimum payment amount. That’s psychology. In your mind, paying the minimum balance is a lot better than paying in full. Wrong!

Paying the balance in full will not only get you out of debt faster, but it will also be a great selling point when you call the creditor to lower your rates.

3. Pay Your Balance on Time or Consider Balance Transfers

Another way to negotiate your rates is to bring up your payment history. Paying your balance on time shows responsibility. It also prevents the card company from adding additional fees to your payment.

Try paying your card balance on time every month.

It’s possible to transfer your card balance to another card with a lower interest rate. Talk to your bank about any transfer fees or rules they have regarding balance transfers.

Sometimes, this may be the best way to secure a lower interest rate.

4. Get A New Card

When all else fails, apply for a new credit card. Research cards with perks like cash back and travel points. Finding a card that suits your needs will benefit you in the long run.

Next, research all of the cards with lower interest rates. Beware of cards with low promotional rates. These rates last for a set period and then change into higher fixed or variable rates.

credit cards with cash

Improve Your Credit Card Knowledge

At Credit Squared, we work to improve your credit card knowledge and help you make educated choices when selecting a credit card.

Contact us for more information.

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4 Comments

  1. I never knew you could do that.

    I thought it was only associated with loans, mortgages, asset relocation or interest.

    I’m glad to come across this insightful article.

    A great read I must confess. It goes a long way to tell me one thing, that you know your subject matter.

    Maybe we could work together on some future project.

    Until then, I will bookmark this and keep an eye out for more of your posts.

    Thanks for posting this.

    • Hi Richard,

      Thanks for the reading and commenting on the post.

      Understanding the interest rate you pay on your credit cards is extremely important.  Things can get out of control when the card company raises the interest rate on your credit card.

      When you find that you are struggling with the monthly payments, a great approach is to call your credit card company and negotiate a lower rate. 

      If you have been paying regularly, you will be surprised how flexible they will be.  There is a great deal of competition out there and they want to keep you as a paying customer.

      If you cant get them to negotiate credit card interest rates, consider moving to another card company that may be more suitable for your needs.

      In the end, the best approach is to pay off balances monthly where no interest comes into play.

      Here is a little more additional information that may help you understand interest rate versus APR.

  2. I never realized that your credit card interest rate could change when the stock market and fed changes interest rates. 

    I guess I just assumed that the rate would always be fixed and couldn’t be changed, similar to a mortgage or car loan. 

    It’s definitely good to know that you can negotiate that rate. It’s similar to negotiating your cable or utilities monthly bill because you can tell them you are going to switch to a competitor and they will usually lower your monthly rate too.

    I like all of your suggestions and will definitely recommend them to other people I know that are struggling with their credit card debt. 

    Thanks for the advice!

    • Hey Jen,

      If you’re credit card is on an adjustable rate, you are at the mercy of Fed rate changes.  Credit card companies start you out with a fixed rate but can change the rate if you’re late after 60 days.

      Sometimes all it takes is a call to your credit card company and you can negotiate credit card interest rates. Particularly if you are a long time customer and have been making your payments on time.

      You can also ask your credit card company to transfer your balances to another card with a lower rate.  If you have been paying them on time they may be willing to work with you.  If not look to transfer your balances elsewhere. 

      Thanks for recommending the site.

      All the best.

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