Is it possible to lower your credit card interest rates?

Believe it or not, you can call your credit card company and ask them to lower the interest rate on your card. Even more surprising? They might actually do it. A CreditCards.com survey found that of the 19% of people surveyed who asked for lower interest rates, 69% were successful. Here’s how to do it.

Your odds of reducing your interest rates are higher if you’re a good customer, says Christopher Viale, president and CEO of Cambridge Counseling Corp. 

“Your best bet is if you’re a longtime cardholder and you pay your bills on time,” Viale says.

Interest rates are higher than ever

The reasons why people want a lower APR on a credit card are clear. Interest rates are at a 25-year high, and about 37% of Americans regularly carry over a balance month to month. That gets very expensive, and incomes haven’t kept pace, Viale says.

“Most people haven’t seen much or any increase in pay while the cost of living has exponentially gone up,” he says.

Credit card interest rates are tricky because they’re variable. Your rate might go up if the Federal Reserve raises the prime rate or if you fall behind on your payments. And if you miss a payment, a penalty rate might kick in. Some penalty interest rates can be as high as 29.9%. 

Lowering your credit card interest rate, even if it’s only temporary, can save you money. Especially if it allows you to pay down — or even pay off — your debt. Even a small change can make a difference. For example, if you have a $5,000 balance, a 17% APR and you pay $150 toward your debt each month, lowering your interest rate to 16% would save you $234 if you took the full time to pay off your balance.

Make your case for lower interest rates

Before you call your credit card company to ask for a lower rate, do some homework. Find out how long you’ve been a customer and how long you’ve made on-time payments. If you don’t know your credit score, that’s worth finding out, too. Also do some comparison shopping for competitor interest rates. 

You’ll probably want to choose a credit card you’ve had for awhile that also has a high interest rate to get the most benefits, Viale says. Call the company and explain that you’re a loyal customer and you’ve consistently made your payments on time. Now is also the time to mention your good credit score (typically 670 and above) if you have one. Credit card companies will also likely consider how much spending you do on credit and your payment history for other debts like your mortgage.

If you’ve been late on your payments before, that doesn’t mean you’re out of luck. It’s still worth trying to get a lower rate. You can explain how having a lower rate would help you pay your bills on time. If you’re really struggling, you might want to ask if your credit card company offers a hardship plan.

Related article: What are credit card hardship programs and how do I know if I’m eligible?

As far as negotiating to get a lower interest rate, you can try two universal tactics: quoting a competitor’s rate and/or telling the company that if they can’t lower your rate, you want to close your account. There’s no guarantee they’ll budge, but if you’re a good customer, they’d probably rather not lose you.

Even if you are successful, however, the credit card company might only agree to lower your interest rate temporarily. But that still saves you money.

Other options to lower your interest rates

If the credit card company doesn’t agree to lower your rate, that doesn’t mean you shouldn’t try another card. Or, wait a few months and try again with the same card. To give yourself the best shot, keep your credit utilization ratio — how much credit you’re using versus how much you have available — under 30% and pay your bills on time. 

You can also shop around for a credit card with a 0% introductory APR for balance transfers. Then transfer debt from a card with a high interest rate to that card. Keep in mind that the 0% interest rate sometimes only applies to the balances you transfer, not new purchases, and that once the offer expires, you could wind up with a very high APR. Many cards also charge a balance transfer fee of 3% to 5% of the amount you transfer.

Related article: Visa vs. Mastercard: What’s the difference and how do I choose?

At the end of the day, your goal is to lower the amount of interest you pay, and there is more than one way to do that. But it pays to know that it’s an option to call up your credit card company and ask for a lower rate. If that change gives you the breathing room to make your payments on time or even put more money toward your debt, all the better.

If you’re carrying a balance on a high-interest credit card, that can be hard to catch up. A lower interest rate really can give you some relief,” Viale says.