Credit card interest rates average between 21.76% and 23.3% as of late 2024, which means even a small reduction can save you significant money over time. Whether you’re dealing with credit cards, mortgages, or other loans, negotiating lower interest rates isn’t just possible—it’s often successful when you approach it the right way.

Why Negotiating Works

Banks and credit card companies want to keep you as a customer. It costs them more to find new customers than to keep existing ones happy. According to a U.S. Public Interest Research Group survey, about half of the surveyed consumers who requested lower interest rates were successful, and their average rate reduction was about 5.53%. That’s real money back in your pocket.

When you negotiate successfully, more of your payment goes toward reducing the actual debt rather than just covering interest charges. For example, if you have a $5,000 balance at 20% APR and only make minimum payments, you’ll pay mostly interest. Drop that rate to 15%, and you’ll save hundreds of dollars and pay off the debt months sooner.

Preparing for Your Negotiation

Before you pick up the phone, gather your ammunition. You’ll want to know your current interest rate, payment history, and credit score. Knowing your credit score can also help since a good score (around 700 or above) provides leverage.

Research competing offers from other companies. Check what similar credit cards or loans are advertising. You don’t need to apply for these—just having the information gives you talking points. Look specifically for:

• Current promotional rates from competitors

• Balance transfer offers with 0% introductory periods

• Lower rates available for your credit score range

Document Your Loyalty

Pull together evidence of why you’re a valuable customer. This includes:

• How long you’ve been with the company

• Your payment history (especially on-time payments)

• Other accounts you have with them

• How often you use the card or service

Making the Call

Keep a friendly but assertive tone, starting with your account details and expressing appreciation for being a customer. Here’s what you might say:

“I’ve been a loyal customer for [X years], and I’ve consistently made my payments on time. I’m looking at some offers from other companies with lower rates, and I’d like to see if there’s anything you can do to help me with my current rate.”

Be honest about your situation. If you’re struggling financially, mention it. If you’ve improved your credit score since opening the account, bring that up. If you’re considering moving your business elsewhere, say so politely.

What to Ask For

Don’t just ask if they can “do anything” about your rate. Be specific:

• Request a permanent rate reduction to a specific percentage

• Ask about temporary promotional rates

• Inquire about hardship programs if you’re facing difficulties

• See if they’ll match a competitor’s offer

If the First Answer Is No

You can also try the HUCA method. HUCA stands for “hang up, call again.” As the name suggests, this tactic involves hanging up and trying again if you don’t like the first response you receive. Different representatives have different levels of authority and flexibility.

You can also ask to speak with a supervisor or someone in the retention department. These departments specifically exist to keep customers from leaving.

If they won’t budge on the permanent rate, ask for:

• A temporary rate reduction (even six months helps)

• Waived fees as an alternative benefit

• A higher credit limit to improve your utilization ratio

Beyond Credit Cards

These same principles work for other types of loans too. For mortgages, highlighting increased home value can improve your loan-to-value ratio, potentially qualifying you for better rates. When refinancing, emphasize your payment history and use competitor offers as leverage.

For personal loans, business loans, or auto loans, the same preparation applies: know your current terms, research alternatives, and present yourself as a valuable customer worth keeping.

When Negotiation Doesn’t Work

If you can’t get your current lender to budge, you have other options. Balance transfers can be an effective strategy, involving moving the balance to a card with a lower interest rate, often with an introductory 0% APR. Just make sure to factor in any transfer fees and understand when the promotional rate expires.

For credit cards specifically, consider applying for a new card with better terms. Most experts recommend keeping your credit utilization ratio below 30 percent for the best results, so having additional available credit can actually help your score.

Making It Stick

Once you successfully negotiate a lower rate, get the details in writing. Ask for an email confirmation or make notes about what was promised and when it takes effect. Monitor your next few statements to ensure the new rate is reflected correctly.

Remember, this isn’t a one-time conversation. John Rampton, founder of Due, has successfully negotiated lower rates for his credit cards and does so periodically. He follows up with requests every six months to ask for lower rates until he gets a “no.”

The worst they can say is no, but the potential savings make it worth the 15-minute phone call. With credit card rates where they are today, even a modest reduction can save you hundreds or thousands of dollars over time. Your wallet will thank you for making the effort.