How to Dispute the Interest Rate on a Credit Card

Getting your interest rate reduced may not be as hard as it seems.
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If you spend a lot of time grumbling about how your credit card's interest rate has gone up over the years, it's time to take action. Kiplinger financial advice columnist Kimberly Lankford cites a recent Lending Club survey that shows that although 93% of credit card users know they can negotiate interest rates, only 29% have attempted it. If you're among the majority who haven't tried, start gathering credit card offers you've received from other lenders and get ready to negotiate.

Step 1

Work to improve your credit score before you try to negotiate your interest rate. Reduce your balance to around 30% of your credit limit on each credit card. Request a copy of your credit report and resolve any errors that you find.

Step 2

Gather new credit card solicitations that you’ve received. Read them to see what interest rates you are being offered. Have the average rate you’re being offered ready when you call your credit card company.

Step 3

Call your credit card company. Tell them your name and how long you have been a customer, as longtime customers are more likely to get a rate reduction than new customers. If you have a good payment history, say so. Then explain that you have received offers from other credit companies with lower interest rates, and that you would like a lower rate on your card. Give them a specific figure based on the offers you have received. It’s recommended that you ask for a low rate even if you don’t know if it will be accepted: asking for a ten point decrease is acceptable, although you may not get it. If the representative refuses your offer, be assertive: tell the representative that you will close your account unless she agrees to reduce your interest rate.

Step 4

Ask to speak with the employee’s supervisor if the employee is unwilling to negotiate. Some employees are not given the autonomy to lower interest rates, so you may have better luck if you speak with their superior. Whatever you do, don’t give up.

Step 5

Call back on a different day. If the supervisor is not willing to help you, trying on a different day may work. You’ll likely reach a different service representative who may be more helpful, or who may put you in touch with someone who handles customers who are considering closing their accounts.

Step 6

Ask to have your annual fees waived if you are unsuccessful in getting your interest rate lowered. If your balance on the card is low to begin with, you may save more by having these fees waived than you would on reduced interest.

Step 7

Consider moving your account to another company. If your company is unwilling to negotiate, transferring your account balance to a lower-interest card will reduce your rate. Just beware of high balance transfer fees, as they can sometimes cost you more than it would to keep a high-interest card.

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