Can I Ask for an APR Reduction on My Credit Card?

You can request a reduced APR, but be prepared to negotiate.

If you're like the majority of American adults, you carry credit card debt month to month. Paying down card balances can take time, especially if your card has a high annual percentage rate, or APR. Luckily, you can often request an interest rate reduction from your credit card company, but it may require some upfront work to improve your chances of success.

What is APR and can I ask for a reduction?

Some credit card companies let you call and request an interest rate reduction. The annual percentage rate is your card's interest rate expressed as a yearly rate. It's the total cost you pay annually for borrowing money. Your credit card's APR is listed toward the end of your monthly billing statement or in your online credit card account. Your card may have multiple APRs for different charges like purchases, cash advances, and balance transfers.

Unfortunately, not all issuers honor requests. There's also no guarantee of approval. But that doesn't mean it's not worth trying, especially if your card carries a high interest rate. Paying down credit cards is often challenging, especially when the balance seems to grow each month with costly interest charges.

How to request an APR reduction

Calling your credit card company and requesting a lower interest rate may seem overwhelming. While your issuer likes to make money, it also likes to keep its customers' business. It may be willing to lower your APR, especially if you've worked hard to improve your credit or plan to move your business elsewhere if it doesn't say yes.

Follow the steps below to request a lower APR from your credit card company.

Gather information

There's important advance work you should complete before you pick up the phone. Before calling, gather the following information:

• Your current interest rate
• Your credit score
• Your credit card balance

Research similar credit cards and compare available interest rates. If you find better offers than your current card, let your card company know when you call. Stick to cards you qualify for based on your credit score. If you have fair credit, it does no good to mention card offers that require excellent credit.

Ask for a rate reduction

With your numbers in hand, it's time to call your credit card issuer. Call the number on the back of your credit card and request a rate reduction. Explain your situation, including any positives such as a history of on-time payments, being a loyal customer, or showing an improved credit score. Be prepared to negotiate, but be polite throughout your exchange.

You can also mention other cards with lower interest rates or introductory 0% APR offers that you can transfer your balance to if necessary.

If denied, find out how to qualify for a lower interest rate

If the customer service representative denies your request, ask what you can do to improve your odds or qualify for a reduced APR. It's possible you just need to build a longer history of on-time payments or improve your credit score to qualify.

Continue to make requests

Continue to improve your situation and try again in a few weeks or months. There are no drawbacks to making multiple attempts other than an additional time commitment.

Even if you're approved for a lower rate, no rule says you can't ask again. Continue to pay your monthly statement on time and in full. Watch your credit score over the next six months to see if it improves. Then call your credit card company again and request another rate reduction.

Tips for requesting a rate reduction

While there's no guarantee your issuer will approve your request, there are steps you can take now that could improve your credit and your chances of success. These tips can also help you if you've been denied a rate reduction already and plan to try again.

• Pay your bills on time. On-time payments contribute to your credit score more than any other factor. Become known for a long history of on-time and in-full payments.
• Keep your balances low. Credit utilization, or how much of your available credit you use, makes up 30% of your FICO credit score calculation. Lowering your overall credit utilization ratio can help improve your credit score.
• Check your credit reports. Review your credit reports, looking for any errors or omissions that could negatively affect your credit history. If you find errors, file a dispute with the credit reporting agency.

Other ways to lower your credit card interest rate

Requesting a rate reduction isn't the only way to score a lower rate on your credit card. Consider the following alternatives if you want access to lower interest rates.

Low-interest credit card

You may qualify for a credit card with a lower interest rate, especially if your credit score has improved. Low-interest credit cards won't necessarily help you pay off current card debt but could lead to fewer charges on future purchases.

Balance transfer credit card

Balance transfer credit cards are an excellent tool for paying off debt while saving money on interest. You can apply for a balance transfer credit card with a 0% introductory APR offer. Make sure you can pay off the balance before the promotional period ends. Factor in any balance transfer fees to determine if it's worth transferring over.