{"id":14665,"date":"2024-11-01T15:11:27","date_gmt":"2024-11-01T21:11:27","guid":{"rendered":"https:\/\/www.lexingtonlaw.com\/blog\/?p=14665"},"modified":"2025-06-04T16:29:20","modified_gmt":"2025-06-04T22:29:20","slug":"how-to-lower-interest-rate","status":"publish","type":"post","link":"https:\/\/www.lexingtonlaw.com\/blog\/credit-cards\/how-to-lower-interest-rate.html","title":{"rendered":"4 Effective Steps to Lower Your Credit Card Interest Rate"},"content":{"rendered":"\n
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The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. <\/em>See Lexington Law\u2019s editorial disclosure for more information.<\/em><\/a><\/p>\n\n\n\n

You can lower your credit card interest rate by following good credit habits and having a solid history of on-time payments, researching how your current interest rate stacks up against competing credit card companies’ offers and calling your credit card issuers to negotiate a lower interest rate and explain why you deserve it.<\/p>\n\n\n\n

If you have credit card debt, negotiating a lower interest rate may save you hundreds or even thousands of dollars. To improve your chances of approval, it\u2019s important to maintain good financial habits and make a convincing argument for why you deserve a rate reduction. Safeguard your financial future by learning how to lower interest rate percentages on each of your credit cards.<\/p>\n\n\n\n

<\/a>What is credit card interest?<\/h2>\n\n\n\n

Interest is what you pay to borrow money from a lender. It\u2019s usually expressed as an annual percentage rate (APR), which is the yearly rate you\u2019ll pay if you carry a balance on your credit card.<\/p>\n\n\n\n

The higher your interest rate, the more it costs you to borrow money. Therefore, it\u2019s critical that you learn how to lower interest rate percentages on your accounts. Here\u2019s an example to show you how a rate reduction may benefit you over time.<\/p>\n\n\n\n

Assume you have a credit card with a 19.99 percent APR and a balance of $1,000. To determine how much interest you\u2019ll pay in 1 month, divide the APR by 12. In this case, 19.99 divided by 12 is 1.7 percent. Then, multiply your balance by 1.7 percent to determine your monthly interest cost\u2014$16.66.<\/p>\n\n\n\n

Now, assume you convince your credit card company to reduce your APR to 12.99 percent. Using the same calculations, your monthly interest cost would drop to $10.83. It may not seem like a big difference, but you\u2019ll pay a lot more over time at the higher interest rate. For example, the interest on a $10,000 balance would be $166.58 per month if you had an APR of 19.99 percent, but it would only be $108.25 at an APR of 12.99 percent. Assuming you pay the same amount of interest every month, that\u2019s a difference of just under $700 per year.<\/p>\n\n\n\n

1. Plan ahead: improve your chances of getting approved<\/h2>\n\n\n\n
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Before you contact your credit card companies, you need to be in a strong financial position. Banks and other lenders are much more likely to work with you if you have a history of positive financial habits. After all, reducing your interest rate leaves them with less revenue, so you have to prove you\u2019re a good risk.<\/p>\n\n\n\n

First, make sure you have a history of on-time payments. If you\u2019ve had a late payment or two, consider waiting six months to one year to request a rate reduction. In the meantime, focus on paying down debt and staying well below your credit limit on each card.<\/p>\n\n\n\n

<\/a>Checking your credit reports and scores<\/h3>\n\n\n\n

Now is a good time to pull your credit reports<\/a> and look for errors. If you find any, such as incorrect balances or late payment notations when you\u2019ve never been late, have them corrected right away. Erroneous information can hurt you when negotiating with lenders, applying for new accounts and refinancing existing loans.<\/p>\n\n\n\n

It\u2019s also helpful to request your FICO credit scores. To increase your chances of qualifying for a rate reduction, you may want to wait until you have a score of at least 670. Scores in the 700s are even better. If your scores are below 670 when you pull them, spend a few months fixing your credit.<\/p>\n\n\n\n

<\/a>Making other financial changes<\/h3>\n\n\n\n

The following actions may also help you qualify for a rate reduction on each of your credit cards:<\/p>\n\n\n\n