How to lower your credit card interest rate
Editor's Note
If you're dissatisfied with the interest rate on your credit card — also known as the annual percentage rate or APR — you might be able to secure a lower rate, believe it or not, by simply asking your issuer.
While it's possible your request may be declined, it doesn't hurt to ask. If you've maintained a history of making timely payments and demonstrated responsible behavior with the issuer, you can leverage these factors to your advantage.
Keep reading to learn more.
Related: What is a purchase APR on a credit card?
Evaluate your current situation
Obtaining a lower interest rate can result in paying less interest over time, making it more than worthwhile to ask. In some cases, you may even qualify for a 0% APR on a credit card for a limited period. However, it is important to note that you typically must have good or excellent credit to qualify for such offers.
If you are considering whether your credit card's APR is reasonable, keep in mind that the average credit card interest rate currently hovers above 20%. If your credit card has an APR significantly higher than the national average, aim for a lower rate when you are ready to negotiate.
Related: What does 0% APR mean?
Find competitive credit card offers
Credit card companies always try to retain customers and remain competitive among other issuers. To determine if your credit card's interest rate is competitive, seek out similar credit cards and compare their APRs. If you come across a card that is similar to yours but offers a better APR, take note of that information and mention it when contacting your card issuer.
It's crucial to ensure that the offer you are comparing is genuinely competitive, however. For instance, if you have a poor credit score, it wouldn't be logical to compare your credit card's APR to that of a card that requires excellent credit. Consider your own creditworthiness and the specific requirements of the cards you are comparing to make an accurate assessment.
Related: 6 things to do to improve your credit score
Call your card issuer and ask
To begin, consider reaching out directly to your credit card issuer and requesting a lower interest rate. It's crucial to be well prepared and know exactly what you need from your issuer. Familiarize yourself with your current credit card terms, such as the APR, grace period, statement due date and current balance. Utilize this knowledge to your advantage by discussing your findings and by researching competing lenders. Remember: It never hurts to ask.
If you happen to find a more favorable offer from another issuer, communicate that information to the representative. Showing that you are considering taking your business elsewhere may increase their willingness to negotiate.
If you have maintained a track record of timely payments and responsible credit usage with your current issuer, they may consider lowering your interest rate to retain your business. Remember, the worst they can say is no.
Also, keep in mind that account longevity holds value. If you have been a customer with your issuer for a significant amount of time, make sure to highlight this during the negotiation process.
If you don't succeed on your first try, we recommend simply hanging up and calling again. It's possible that a second or third customer service rep will be more accommodating to your request.
Related: Are you paying enough attention to your credit card's APR?
Build your credit score
Whether you are applying for a new credit card or attempting to negotiate a lower APR on your current card, one effective way to secure a better interest rate is to improve your credit score. One of the simplest ways to enhance your credit rating is to consistently pay your credit card bill early or on time each month.
Moreover, it is advisable to avoid opening numerous new accounts, as this results in multiple hard inquiries on your credit report. Additionally, closing accounts can increase your credit utilization, which can negatively affect your credit score.
If you have a significant amount of debt relative to your credit limit, paying off your debt can also have a positive impact on your credit score. Experts generally recommend maintaining a credit utilization ratio below 30% for optimal results. By following these guidelines, you can work toward improving your credit score and increase your chances of obtaining a more favorable interest rate.
Read more: How do credit scores work?
If denied, apply for a balance transfer card
To reduce the amount you pay in interest during a limited period, consider applying for a balance transfer credit card. Many of these cards offer an introductory 0% APR for up to 21 months on transferred balances. It's important to note that these offers usually come with a balance transfer fee, so the 0% APR is not entirely free.
Nonetheless, opting for a balance transfer credit card is an excellent way to consolidate your debt without further negatively affecting your credit.
Remember that a 3% to 5% fee (with a minimum of $5) will apply to these transfers, and you often must complete a balance transfer within the first 60 to 120 days to benefit from the introductory rate.
Related: What is a balance transfer?
Bottom line
You can take several reliable steps to help you completely avoid paying credit card interest. By only making purchases that you can afford and consistently paying your credit card bill in full every month, you can prevent any interest charges.
However, if you do find yourself with credit card debt, it is crucial to aim for the lowest possible interest rate. Requesting a lower APR from your current credit card issuer might be a straightforward way to achieve this goal. Alternatively, in certain situations, it may be more advantageous to transfer your balance to a new credit card with an offer of 0% APR.
Lastly, it's not a bad idea to learn more about the difference between APR and interest rates.
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.