Want a lower credit card interest rate? Just ask



A five-minute phone call to your credit card issuer could save you hundreds of dollars — or more — in interest charges.

If you’ve been a good customer, your credit card company will likely lower your interest rate.

If you’ve been a good customer, your credit card company will probably reduce your interest rate.

But you have to ask.

Lowering rate
Decide what rate you would like on your card. Be reasonable. You can figure out an appropriate rate by looking at credit card offers you get in the mail.

Check your credit reports. If you have a healthy credit history, proceed to step 3.

Call the credit card company and follow a script similar to the one on how to ask for a rate cut.

If you don’t get the answer you want, ask to talk to a supervisor or call again later.

Seek sizable cut
A March 2016 survey from CreditCards.com found that 78 percent of cardholders who asked for a rate cut received one. Just 1 in 5 customers has ever asked the question though.

“It’s kind of like asking the best-looking girl in school out on a date. The worst she can say is ‘no,’” says Mike Sullivan, spokesman for the Phoenix-based nonprofit credit and debt counseling agency Take Charge America.

Sullivan recommends calling your card issuer at least every two years to ask for a rate reduction.

“Ask for something sizable,” he says.

Keeps customers happy
It costs card companies significant money to acquire new customers, so they’re going to do everything within reason to keep their good customers happy and keep them from taking their business elsewhere.

That includes providing rate reductions.

“From what we’re seeing in the market, there’s just a tremendous amount of competition right now over credit card customers,” says Alex Johnson, director of the credit advisory service at Mercator Advisory Group, a payments industry consulting firm near Boston.

Not easy for all
Banks have relaxed credit standards in recent years, Sullivan says, which means more people are probably eligible for a rate cut than in the past.

But getting the card companies to say yes isn’t easy for everyone.

Just 36 percent of customers under age 30 received a rate cut after asking, and one-third of African-American cardholders were successful, the CreditCards.com survey found. Household income and education level did not affect whether a cardholder’s request was approved.

Some factors
Here are some of the factors that go into a card issuer’s decision on whether to approve a rate decrease, according to the U.S. Public Interest Research Group:
•How long you’ve owned the card.
•The card’s credit limit.
•How much you owe on the card relative to the credit limit.
•How much you owe on all cards relative to their credit limits.
•How many times you’ve made a late payment.

Before you call, check your credit reports, Sullivan says. If all of your credit lines say “pays as agreed,” you should have a healthy credit history and are more likely to win approval.

A script
When you call the company, you may want to follow a script similar to this:
Hi, my name is ____. I am a good customer, but I have received several offers in the mail from other credit card companies with lower APRs. I want a lower rate on my card, or I will cancel my card and switch companies.

Of course, how you ask the question doesn’t really matter. The decision won’t be made based on the customer service representative’s opinion of you.

“This is pure business,” Sullivan says. “No major credit card company is going to let a customer service rep decide based on whether they think you’re a nice person.”

Persistence is key
Subtle or not-so-subtle threats to open a credit card with another company can pay off, as well.

“I think that many customers don’t realize how much power they have,” says Beverly Harzog, a credit card expert and author of “The Debt Escape Plan.”

But persistence is key, she says. You may not get a “yes” from the first person you speak with — or you may not get the rate cut you’re looking for. In that case, ask for a supervisor. You may even want to hang up and call back later.

“Have a rate in mind” when you call, Harzog says. Do your research and learn what kind of interest rates a person with your credit score can qualify for.

Tell the issuer what you want and what you can get from other issuers.

“I think it’s a good idea for you to let them compete for your business,” Sullivan says. “That’s the American way.”

Cut or transfer?
If you want the rate cut because you have a large balance to pay off, you may be better off opening a new card with a zero percent introductory interest rate on balance transfers, Sullivan says.

Opening a new card can have an added positive impact. Having more available unused credit could improve your credit score. Plus, you may then receive an offer from your old company wanting to earn back your business.

“They know where you paid it off from,” Sullivan added.



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