How to negotiate a lower credit card APR

By Jemma Porter

At a time when everyone is feeling the pinch, achieving a lower credit card APR could help give you a little extra money each month. However, you first have to ask your credit issuer for it.


It's harder than it used to be to negotiate lower APRs. However, if you have a good credit score and relatively low levels of debt, a creditor may be willing to negotiate with you.

Here are five tips to help you negotiate a lower credit card APR.

1. Find an alternative offer from a competitor.
In the past, your UK credit card company may have believed that their customers could easily have taken their business to a rival creditor. But fewer companies these days are willing to stick their necks on the line and reduce interest rates, and so they may not be as willing to automatically slash your rate without any evidence that you could go somewhere else.

However, if you compare credit cards and get an alternative offer from another company, this might persuade your creditor to negotiate with you.

2. Know your credit rating.
Before you even think about contacting providers, check your credit rating. If you have a less than stellar payment history or a lackluster credit rating, your credit card company will very likely reject your request.

If you check your credit rating and it's average or worse, take steps to boost your credit score before you try to lower your credit card APR.

3. Find out average interest rates.
If your credit card has a higher than average credit card rate, you will be in a better position to negotiate the APR than if you already have a low-interest card. When discussing your APR with your creditor, you will need to be realistic.

Asking for a modest rate compared to average rates will give you a better chance of success than requesting an exceptionally low rate on your card.

4. Consider asking for a temporary reduction.
Your credit card company may be unwilling to lower your credit card APR permanently, but if you provide them with a reason why they should do it for a fixed period of time, you may be able to negotiate with them.

You could persuade them, for example, by saying that the lower rate could help you manage and reduce your debt when it returns to the higher rate. If you do ask for a temporary reduction, make sure that you leave the offer open to re-evaluation after the fixed period.

5. Don't give up.
Since the credit crunch, credit card companies have tightened their grip and raised their standards for lowering a customer's APR. If your company declines your request, you can contact them again straight away and hope to speak to a different adviser. Should this fail as well, try again in a couple of weeks and ask to speak to a supervisor. Supervisors are often the people with the authority to change your account.

Meanwhile, continue to review new offers. You may be more successful transferring your balance to a card with a lower rate. 

See related: How to change the due date on your credit card; How to safely get rid of an old credit card

Published: 9 December 2011