If you’re in the process of paying off a credit card debt but feel like your interest rate is too high, you have the option of negotiating your Annual Percentage Rate (APR) with your credit issuer. When you feel ready to talk to your credit card company, dial the customer service number on the back of your credit card, then choose the options that will route you to speak with a representative. When the representative picks up, here are some tips that can help you negotiate:
Cut Straight to the Chase
Once you’ve given all the necessary information, make sure to establish yourself clearly. Here’s a quick script you can follow: “Hello, I’m ______. I have a ______ card and have been a loyal customer with you since _______. Recently, I’ve been looking into other credit cards that provide a better value with a lower APR. I would prefer to stick with my current card, but there are some good offers out there. Given my payment and credit history, can you help me lower my APR on this card today?” Chances are good that at this point, the customer service representative will transfer you to a different department. If this happens, you should repeat the same introduction when the new representative picks up.
Know Your Options
Before getting to the nitty-gritty of interest rates, make sure you have a list of cards that you could potentially switch to. This will give you the leverage you need when negotiating. If you currently have credit card debt, your best option is probably going to be a balance transfer card. These cards include a promotional 0% APR for your first year, and usually carry a 2-3% transaction fee for any outstanding balance that you transfer over from your current card. So if you were to transfer your current $3,000 balance to a card with a 3% transfer fee, you’d pay a one-time transaction fee of $90 and then have a full year before you’d have to start paying interest on the debt again. There are even some balance transfer cards that carry no transfer fee–check out your best options here, and read our guide on balance transfer cards to determine whether they’re right for you.
Negotiate Your Interest Rate
If you’re not interested in any of the card company’s promotional offers and just want to lower your APR, let the customer service representative know. At this point, their system will review your account. With any luck, they’ll offer you an APR that is about 3 to 7% lower than the one you currently have. Your chances are especially good if it’s been more than a year since you last got an APR reduction.
If the customer service agent does not offer a lower APR, know that you can keep trying. Try giving your card company another call after your next cardholder anniversary–often, they will have more offers available to you by that point and may be able to reduce your APR.
You can also ask to speak to a supervisor to review your case. Make sure to reiterate that you’re considering switching to a balance transfer card if your current APR isn’t lowered. Often, the threat of losing money on interest and fees will spring the credit card company into action.