How To Lower Your Credit Card Interest Rate (2023)

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The cost of borrowing money can skyrocket when using a credit card over other types of loans. Paying some fee to borrow money for longer than a billing cycle remains unavoidable in most circumstances and we always recommend paying your balance in full each month to avoid incurring any interest. But for those who need to carry a balance, interest rates can seem less like an inconvenience to avoid and more like a major budget line item to account for.

Cards with high 25% to 30% APRs make carrying a balance an expensive endeavor, but even a 10% APR can be high compared to other forms of borrowing. While it is true the lender sets your interest rate when you open a card, few are immovable. It is possible, with some effort, to negotiate or renegotiate your interest rate(s). Results may vary depending on your credit history, outstanding balance and other factors, but if you’re prepared and ask at the right time you may stand a good chance of lowering your rate and saving yourself money.

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The Slate Edge does not offer rewards on purchases.

Welcome Bonus

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Annual Fee

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Regular APR

19.24% - 27.99% Variable

Credit Score

Excellent, Good(700 - 749)

(Video) How to Lower Credit Card Interest Rates
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Editorial Review

The Chase Slate Edge is a reasonable option for those looking to consolidate debt.

Pros & Cons

  • Introductory APR
  • Get an automatic, one-time review for a higher credit limit when you pay on time, and spend $500 in your first six months.
  • No annual fee
  • Doesn’t earn rewards
  • High balance transfer fee
  • High foreign transaction fee

Card Details

  • Start off strong with 0% Intro APR for 18 months from account opening on purchases and balance transfers. A variable APR of 19.24% – 27.99% on balance transfers and purchases after the introductory period ends.
  • Lower your interest rate by 2% each year. Automatically be considered for an APR reduction when you pay on time, and spend at least $1000 on your card by your next account anniversary.
  • Raise your credit limit. Get an automatic, one-time review for a higher credit limit when you pay on time, and spend $500 in your first six months.
  • All for no annual fee – You won’t have to pay an annual fee for all the great features that come with your Slate Edge℠ card
  • Keep tabs on your credit health – Chase Credit Journey helps you monitor your credit with free access to your latest score, real-time alerts, and more

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(Video) Exact Script To Lower Credit Card Interest Rate

Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.

Knowledge Is Power

Assess your credit health before making any big ask of a lender. Typically, a higher credit score equates to lower interest rates. Likewise, income may be taken into consideration when determining your interest rate. Because those with lower income and lower credit scores are seen as higher risk borrowers, card issuers and other lenders will be less-inclined to offer deals—in fact, for many low-income, low-credit applicants even just opening an unsecured credit account with many issuers can be difficult if not impossible.

Ensure your credit report is accurate and up-to-date. Ensure that you haven’t missed any payments within the last 12 months—a history of late repayment may make lenders less inclined to give you an adjusted rate. You’ll also want to ensure you pay down any outstanding debt as much as you can before contacting your lender. Try to shoot for less than 30% of your total credit limit outstanding (also known as your utilization rate).

Even if your credit isn’t excellent, there may still be hope. If your score has recently increased, or your income has grown, you may be in a good position to renegotiate. Conversely, if you’ve suddenly experienced a financial hardship—like an unexpected medical illness or unemployment—you may also be able to get an adjusted rate. Card issuers often advertise understanding in the face of crisis.

Next, identify the rate or rates you’re currently paying. If you have multiple cards, you’ll have to do this for each one. Search your credit statement for “Annual Percentage Rate” (APR). This number reflects a factor of the amount you pay on your outstanding debt each billing cycle. To learn more about APR, read our extensive guide.

It’s also a good idea to ensure you fully understand your own financial position. During any negotiation for a better interest rate, gathering information about your normal income, expenses, total assets and liabilities can help you see yourself the way a potential lender will, which in turn can help you improve your position and become a better candidate for a rate improvement.

Also do some research to understand the market. Check competitor credit cards and see what kind of deals they offer. If you discover a rival company offers a better rate than you currently receive, you may be able to leverage this information when negotiating—even if you don’t want to switch lenders. Other companies preapproving you for better rates may also be a likely indicator that your credit standing has improved.

Negotiating With a Lender

When you ask for a lower rate, it’s important to have a general idea of what you want to say, so we can’t emphasize enough how important it is to be prepared. Once all your information is in order and you have a good idea of what you want—and what you need—you’ll be ready to negotiate. Begin by calling the account you’ve had the longest, as account longevity and history may provide you some leverage. Your bank may recognize you as a profitable customer if you’ve been banking with it a long time.

Be sure to emphasize your stellar repayment record, any better offers from rival companies and/or your unexpected financial hardship. Make your case respectfully, but be firm about your needs. Don’t be discouraged if the rep tells you there’s nothing they can do. Politely ask to be directed to a supervisor and if you’re still told a reduction isn’t possible consider asking for a temporary change. They may be more likely to allow a temporary change, which may help you find a better option or a new company to do business with.

As a last resort you may suggest you will close your account if you do not receive a lower rate. This is not a threat to make lightly, as you still have to pay any outstanding debt before you can close an account. If your card has a large outstanding balance, this tactic won’t hold much weight at all.

Balance Transfer as an Alternative to a Lower Rate

For credit cardholders facing carried balances with high interest rates, a balance transfer card option may help reduce a rate or, with the right account, provide a few months of reprieve from interest altogether. A balance transfer moves a balance to a new card—ideally with a lower interest rate. There is often a balance transfer fee from a new card issuer, but many issuers offer 0% introductory APRs on balance transfers for a year or longer to attract customers trying to dig themselves out of debt. To learn more about how to do a balance transfer, read our guide.

Find the Best Balance Transfer Credit Cards Of 2023

(Video) How to lower your credit card interest rate

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Bottom Line

If you maintain good credit and a clean payment history you can often be granted a lower interest rate. Even if you don’t, don’t give up. Continue to make payments on time, reduce outstanding debt and make a plan to try again in three to six months. Improving your credit health will help you make your case next time. People like to help people who help themselves, and credit card companies want your business. If you give the company a profitable reason to help you, it will often do so. It’s just a matter of ensuring you’re in as strong a position as possible when you make your ask.

FAQs

How can I lower my monthly credit card interest? ›

But there are also ways to reduce your interest costs significantly as you pay down debt.
  1. Pay off your cards in order of their interest rates. ...
  2. Make multiple payments each month. ...
  3. Avoid putting medical expenses on a credit card. ...
  4. Consolidate your debt with a 0% balance transfer card.
Feb 11, 2022

What is a good interest rate on a credit card? ›

A good APR for a credit card is anything below 14% -- if you have good credit. If you have excellent credit, you could qualify for an even better rate, like 10%. If you have bad credit, though, the best credit card APR available to you could be above 20%.

Why is my APR so high with good credit? ›

The bottom line. Card rates are high because they carry more risk to issuers than secured loans, for one. With average credit card interest rates climbing to almost 20 percent, the best thing consumers can do is strategically manage their debt.

Why am I paying so much interest on my credit card? ›

For banks and other card issuers, credit cards are decidedly risky because lots of people pay late or don't pay at all. So issuers charge high interest rates to compensate for that risk.

Does it hurt your credit to ask for a lower interest rate? ›

Key Takeaways. Customers can negotiate with credit card companies for lower interest rates. Seeking to negotiate a credit card rate can be a good solution in a variety of situations. Requesting a lower rate should not affect your credit score or credit account.

Will lower interest rate hurt my credit? ›

The interest rate charged is not a scoring factor, however, a lower rate could indirectly help your score. Remember, a lower credit card APR will allow you to put more of your payment toward the principal balance on the card. As your principal is paid down, your available credit will increase.

Is 26.99 APR high for a credit card? ›

Is a 26.99% APR good for a credit card? No, a 26.99% APR is a high interest rate. Credit card interest rates are often based on your creditworthiness.

Is 17% interest on a credit card high? ›

In many cases, these cards may be balance transfer credit cards, which are used to consolidate debt and save money on interest. If you have an APR that is less than the average APR of around 17%, that can be considered a good interest rate. The lower the rate, the better the APR.

Is 24.99 APR good for a credit card? ›

A 24.99% APR is reasonable for personal loans and credit cards, however, particularly for people with below-average credit. You still shouldn't settle for a rate this high if you can help it, though. A 24.99% APR is reasonable but not ideal for credit cards. The average APR on a credit card is 20.16%.

Is 12% APR too high? ›

A low credit card APR for someone with excellent credit might be 12%, while a good APR for someone with so-so credit could be in the high teens. If “good” means best available, it will be around 12% for credit card debt and around 3.5% for a 30-year mortgage.

Is 22% APR too high? ›

A 22% APR on a credit card is higher than the average interest rate for new credit card offers. A 22% APR means that the credit card's balance will increase by approximately 22% over the course of a year if the cardholder carries a balance the whole time.

Is 16.74 APR good for a credit card? ›

APR stands for annual percentage rate, and it refers to the amount of interest you'll pay if you carry a balance on your credit card. A good APR is anything below the national average, which is 16.17% (as of February 2022).

Why did I get charged interest if I paid in full? ›

Since it accrues after your billing period closes, you won't see it on your current statement. So, even if you pay your current statement amount in full, your next statement may come with a surprise: you still owe accrued interest.

How can you avoid paying high interest rates on cards? ›

Your best bet is to pay the balance in full by the due date on the monthly statement. You won't have to pay interest and you'll have more money in your pocket!

Should I pay off my credit card in full or leave a small balance? ›

It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.

At what credit score do interest rates drop? ›

A credit score of 700-plus will usually land a borrower a lower interest rate, and while mortgage industry experts say you can still qualify for certain loans with a score under 680, the 700s are where you can expect to pay the lowest rates.

Will credit cards waive interest? ›

Most credit cards provide an interest-free grace period of around 21 days–starting from the day your monthly statement is generated, to the day your payment is due. However, if you don't pay it during that time, an interest charge will go into affect and you will end up with a balance that rolls over to the next month.

What credit score will get you a low interest rate? ›

“The best published interest rates for auto loans are 720+ and for mortgages 760+,” financial expert John Ulzheimer, formerly of FICO and Equifax, tells Select. “As such, I always tell people, shoot for 760 or better.

Can I ask Capital One to lower my interest rate? ›

One way to lower the interest rate on a Capital One credit card is to call customer service and try to negotiate a reduced rate. Alternatively, if your financial situation is especially dire, Capital One offers a credit card hardship program.

What interest rate can I get with a credit score of 689? ›

If your FICO credit score is between 660 and 689, you may qualify for an interest rate around 7.432%.

What is the interest rate for 640 credit score? ›

An individual with a 640 credit score will typically receive a credit card interest rate of between 20.5 and 16.5 percent. In comparison, someone with excellent credit can receive an average credit card interest rate of 13.5 percent.

What is a too high APR? ›

A 36% APR is not good for credit cards, mortgages, student loans, or auto loans, as it's far higher than what most borrowers should expect to pay and what most lenders will even offer. A 36% APR is high for personal loans, too, but it's still fair for people with bad credit.

What is the highest APR allowed? ›

Interest Rate Limits. For personal loans, the limit is 12%.

Should I have 3 credit cards? ›

If your goal is to get or maintain a good credit score, two to three credit card accounts, in addition to other types of credit, are generally recommended. This combination may help you improve your credit mix. Lenders and creditors like to see a wide variety of credit types on your credit report.

Is 20% a high APR for a credit card? ›

Chip Lupo, Credit Card Writer

A 20% APR on a credit card is higher than the average interest rate for new credit card offers. A 20% APR means that the credit card's balance will increase by approximately 20% over the course of a year if the cardholder carries a balance the whole time.

Is 30% APR high on a credit card? ›

A 30% APR is not good for credit cards, mortgages, student loans, or auto loans, as it's far higher than what most borrowers should expect to pay and what most lenders will even offer. A 30% APR is high for personal loans, too, but it's still fair for people with bad credit.

What is the average US credit score? ›

Credit scores are three-digit numbers that show an important piece of your financial history. Credit scores help lenders decide whether to grant you credit. The average credit score in the United States is 698, based on VantageScore® data from February 2021. It's a myth that you only have one credit score.

Is 15% a high APR for a credit card? ›

A good credit card APR is one that's below the national average credit card rate, which is 16.65% as of the second quarter of 2022, according to Federal Reserve data.

How can credit card users avoid paying interest each month? ›

The best way to avoid paying interest on your credit card is to pay off the balance in full every month. You can also avoid other fees, such as late charges, by paying your credit card bill on time.

Can I lower my monthly credit card payments? ›

Paying down your credit card balance is the best way to lower your minimum payment. Since your minimum payment is based in part on the total debt you owe to your credit card issuer, paying off a portion of your credit card balance can reduce your monthly minimum payment.

Can I ask my credit card company to lower my monthly payment? ›

Remember creditors are under no obligation to accept less than you owe, but it never hurts to ask. Be aware that settling debt for less than you owe could have unexpected tax consequences. If you settle your debt for a reduced amount, your credit card company could report your settled debt to the IRS.

How much should I spend if my credit limit is $1000? ›

A good guideline is the 30% rule: Use no more than 30% of your credit limit to keep your debt-to-credit ratio strong. Staying under 10% is even better. In a real-life budget, the 30% rule works like this: If you have a card with a $1,000 credit limit, it's best not to have more than a $300 balance at any time.

Does freezing your credit card stop interest? ›

When you freeze your card, any recurring payments that you've already set up will continue to be processed. Also, please note that interest charges will continue to accrue on the unpaid balance. So, you will still have to make at least the minimum monthly payment.

Does it hurt to pay your credit card twice a month? ›

Reducing the interest you pay

If you typically carry a balance on your credit card from one month to the next, then making multiple payments during each billing cycle can reduce your interest charges overall. That's because interest accrues based on your average daily balance during the billing period.

Is it OK to pay credit card multiple times a month? ›

The number of payments you make each month doesn't matter as long as you make at least the one minimum payment. However, one point to keep in mind if you pay your card often is that multiple payments don't carry forward.

Will credit card companies lower your interest rate if you ask? ›

It may decline your request, but it doesn't hurt to ask. If you've established a history of on-time payments and other responsible behavior with the issuer, leverage this information to your benefit. A lower interest rate can ensure you pay less in interest over time, so it's worth asking.

How to get rid of 30k in credit card debt? ›

Pay more than the minimum payment each month.

If you have 30k in credit card debt, you need to be making significant payments toward your bill or your debt will continue to multiply. This means paying more than the minimum payment each month, and ideally more than what you added to your statement in the previous month.

Is there a credit card forgiveness program? ›

Most credit card companies are unlikely to forgive all your credit card debt, but they do occasionally accept a smaller amount in settlement of the balance due and forgive the rest. The credit card company might write off your debt, but this doesn't get rid of the debt—it's often sold to a collector.

Will negotiating credit card debt hurt? ›

Yes, settling a debt instead of paying the full amount can affect your credit scores. When you settle an account, its balance is brought to zero, but your credit report will show the account was settled for less than the full amount.

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