How Do I Reduce Interest Rate on Credit Cards Through Hardship?

Companies may not agree to reduce your interest rate if you continue to run up the balance on your cards.

Companies may not agree to reduce your interest rate if you continue to run up the balance on your cards.

Financial hardships such as the loss of a job or an unexpected medical event are justifiable reasons for reducing credit-card interest rates, according to several credit card issuers. While most customers can ask for and receive an interest-rate reduction, a financial hardship might result in an interest rate close to 0 percent. This is a win-win situation for both parties, as the credit card company risks losing the entire amount if your hardship leads to bankruptcy.

Items you will need

  • Credit card statements
  • Paperwork validating your hardship (such as a layoff notice or medical invoice)

Gather your financial information. Be prepared to answer any questions your credit card company may have to justify your hardship. A customer service representative may ask you about your current monthly income, fixed expenses and discretionary expenses. He might argue that discretionary expenses, such as entertainment and clothing, don’t substantiate a financial hardship. Keep in mind that the person on the other end of the phone has access to previous credit card statements. In addition, he may question expenses that you believe necessary, such as cable and high-speed Internet.

Stop using credit cards. It’s unlikely that companies will be willing to negotiate with you if you keep running up the balance. Remember, they are working with you to avoid your filing for bankruptcy. Going further into debt isn’t a good sign that you’re doing your part.

Contact each credit card company. Choose the company for which you’re paying the highest in interest. Note that this may not be the card with the highest interest rate. This company may be the most willing to negotiate to avoid losing your balance altogether. Explain your hardship and specify how much money you’ve paid thus far in interest to this company. Ask for a temporary hardship reprieve to 0 percent until you can get back on your feet. If creditors ask how much time you’ll need, be prepared with an answer. Otherwise, the credit card company will decide this for you and you may not be able to extend it when it ends. Some creditors have maximum time limits on hardship grants.

Request a written copy of the agreement. . After you’ve negotiated a reduced interest rate, be sure to get it in writing. This way, if the company continues to assess the previous interest rate, you’ll have evidence of your conversation with the company.


About the Author

Sara Huter is a professor of economics. Her background also includes risk management in the banking and energy industries with expertise in credit scores. Huter received an M.B.A. in finance from Texas A&M University and a B.S. in information systems from Kansas State University. She has been writing for over five years with work at, and

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