Top Dos and Don’ts for Negotiating Credit Card Interest Rates

November 11, 2018

By Sarah Harris

It’s a common misconception that credit card rates are somehow set in stone.  In fact, it’s not that easy to find a credit card that has a single, set interest rate.  The vast majority start out offering a range of interest rates (variable annual percentage rate, or APR), with your actual rate to be determined by your tier of credit, among other factors.  If a card has an advertised variable APR of 17.74% – 24.74%, for example, you’ll only nab the lowest rate with a top tier credit score, whereas a lesser credit score will only qualify for a higher interest rate within the given range (and poor credit candidates may not qualify at all, depending on requirements for the card).

What most people don’t realize is that interest rates and other terms may be negotiable.  If you’re an excellent, or even just a good candidate based on your credit score and history, credit card companies want your business.  They need reliable customers like you if they want to stay in business.  As a result, you have bargaining power, especially if you’re willing to spend some time doing research and comparison shopping to find the creditor and the card you prefer.  Even if you can’t get the low, low rate you want, you never know what you can accomplish if you don’t even try.

As Wayne Gretzky famously quipped, “You miss 100% of the shots you don’t take.”  You might be surprised by the concessions you can get just by making a phone call to your preferred credit card company.  Of course, you have to go into the process with a solid strategy in mind if you want to succeed.  Here are just a few dos and don’ts for negotiating credit card interest rates.


Understand the Terms Offered
This is important.  If you’re looking for an interest rate under 10% and you start out with a credit card that offers a variable APR around 18% on the low end, you’re not going to get anywhere near what you’re looking for, and no amount of negotiating will change that.  You have to be realistic and work within the parameters of what is offered.  If you’re a stellar candidate, you may get a bit more wiggle room than the average customer, but even that will only get you so far.

Know What Competitors are Offering
Whether your personal credit is excellent, good, or poor, part of negotiating for better terms is understanding what you can get elsewhere.  Obviously, the best strategy is to go into negotiations with a healthy credit score and history, but regardless, you can use competing offers to negotiate with your preferred credit provider.  You’ll need to learn about incentives for taking new credit card offers, such as balance transfer rates, as well as ongoing raters.  This can help you to negotiate lower interest.

Speak with a Person in Authority
Even if representatives want to help you, they’re often limited in what they’re able to do.  You can avoid finding this out the hard way by simply asking to speak to a supervisor or manager right off the bat.  These are the people that actually have the power to make significant changes to credit card terms without having to kick it further up the chain of command.

Enumerate Your Strengths
If you have top tier credit, a clean credit history, a sizable income, significant spending habits, and you tend to maintain roughly 30% balance on your credit cards (with regular usage and payments), you’re an ideal customer for credit card companies.  They not only want to gain your business, they don’t want to lose it.  This puts you in a great position to negotiate and you should make a point to remind creditors what you bring to the table.


Lie About Your Credit
Why on earth would you lie?  Creditors have the ability to check your credit report in an instant.  They can tell immediately if you’re lying and they won’t appreciate it.  If you know there are factors that could keep you from negotiating the terms you prefer, you simply have to prepare to counter them with positives that support your position or factors that give you leverage (like offers from other creditors).

Get Pushy
There’s a difference between taking a firm stand and harassing the person you’re negotiating with.  You’ll get a lot further when you present a solid argument and you’re prepared to walk away than if you try to bully someone into giving you what you want.  When you’re rude and aggressive with representatives, they have no incentive to help you out.  Remember, they’re just people doing a job.  Be assertive and compelling, but make sure to be nice, as well.

Expect Handouts with Poor Habits
If your credit history is spotty and your rating is less than stellar, don’t expect creditors to be keen on handing out favors.  It never hurts to try to negotiate, but with poor credit you’re not in a great position to bargain.  If you want to increase your chances of lowering interest rates and seeking more favorable terms, work to improve your credit with the goal of preparing for negotiations.

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