Get It Done: Negotiate With Your Lender

Most credit cards charge anywhere from 0% to 20% in interest. Heck, we've seen cards that charge as much as 41%! But you can negotiate with your credit card company for a lower rate, particularly if you've had any of your cards for a while.

Just call them up to demand a lower rate. Shoot for 9% or 12%. You'd be surprised at how easy it is.

Here's how:

1. Start with a card that you've had for a while, and where you've never been late with payments.

2. Flip over your card and dial the customer service number.

3. Start negotiating. Now it's time to get what you want. Tongue-tied? Consider this sample script -- the Fool's exclusive Rate Negotiation Dialogue -- for ideas on what to say.

Sample Script

You: "I just got this incredibly great offer in the mail for a new credit card that has an introductory interest rate of only 5.9%! I don't really want to switch cards, since your service has been great. But even though I've had your card for three years, I'm still paying a 17% rate on my balance. I’m going to have to transfer my balance unless you can lower the interest rate."

Them: (The sound of a flurry of keyboard rat-a-tat-taps and your credit and payment history being scrutinized.) "Hmmm … well, that is the going rate … let’s see …"

You: "Sure, but I can pay a lot less in interest if I transfer my balance. I really need you to reduce the rate to 9% or so."

Them: "Let me check with my supervisor … OK, how about 9.8%?"

You: "No problem." (Now go treat yourself to a snack -- a cheap one! -- for saving some bucks!)

This may not work as well if you're frequently late with your payments and deeply in debt. But it can't hurt to at least ask for an interest rate reduction on all your cards. If you have a solid track record, don’t litter, are generally polite, or can imitate a halfway decent French accent during the call, your lender should be willing to offer you a lower rate to keep from losing you to the competition.

4. Keep trying. If you don't get what you want the first time, try to get another customer service rep or supervisor on the line. Still won't budge? Mark your calendar and call back in a few months.

5. You might want to combine your debts onto one or two of your lowest-rate cards if you can. (If you're maxed out on those cards, then forget it.) Simply call your lender and ask how to transfer funds. And be sure to find out what fees -- if any -- you’ll be charged. Weigh those against any interest savings before making the move.

Read/Post Comments (7) | Recommend This Article (50)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 31, 2008, at 10:35 AM, tbyrd58 wrote:

    Chase has come up with a new underhanded trick. The customers who were extended promotional rates are having there minimum payments increased from 2% to 5% and having a $10 dollar monthly fee added to their account. Consumers with a $400 minimum payment find themselves with a $1,000 minimum payment. Several are reporting on credit card boards that callers complaining were told the increase is because of their promotional interest rates and have received a counter offer of doubling their interest rate but retaining their old minimum payment. It appears the minimum payment was not covered in the terms and agreement.

  • Report this Comment On December 31, 2008, at 10:57 AM, ChesapeakeSailor wrote:

    USAA offers a prime + 0% rate to members with strong credit. They recently modified that with the caveat that the minimum is prime + 0 or 6% whichever is higher, but it's still a great deal.

    Previously open only to activity duty military and veterans, USAA has recently expanded their membership eligibility rules. If you've got good credit and are a military vet or are a child, parent, spouse, or widow of a military vet or active duty military member, it might be worth a few minutes of your time.

    Their card agreement is written in plain English, their customer service and online tools are excellent, and when they do change the rules (like the 6% minimum above) they send a separate notice, instead of just burying it in the fine print on your statement.

    Disclosure: I'm not employed at USAA nor do I get any referral benefit. I am a military vet and a USAA member.

    I know there are other associations and credit unions with similar good deals. Shop for them aggressively and either sign up, or use them to bargain with your current card issuer. TMF is spot on here, no one with decent credit should be paying more than ~10% on a credit card balance.

  • Report this Comment On January 01, 2009, at 12:43 PM, mrchairman11 wrote:

    I think it is disturbing what credit card companies are doing these days. I have 0 credit card debt; however, maintain my cards in the event of an emergency. However, recently I received a notice from C_One notifying that they were closing my account due to inactivity for over 16 months, WOW!

    Do the right things and get introduced to a negative mark on your credit report due to an account being closed by the lender.

    Lucky for me I called and they switched to closed at the borrowers request, saving me about 25 to 50 points. I then asked that they transfer me to the business section and proceeded to close all of my company's business accounts with C_One and they tried every trick under the sun to keep my business. No way was I staying!

    I guess it goes to show that even when you keep debt to minimum or zero your business is not valued.

    On another note, I negotiated with all my creditors in the past to achieve zero credit card debt, now if I can only get the car loan companies to lower their rates.

  • Report this Comment On June 30, 2010, at 10:16 AM, foolsgoldenrule wrote:

    With all of the new debt consolidation companies coming out of the wood work, how do you now if they are legitimate or not??

  • Report this Comment On January 19, 2011, at 9:18 AM, iCinSi wrote:

    I had a $0 balance on a Chase card for over a year. I recently had to make an emergency purchase using that card of about $2,000. After checking my balance I see they have my interest rate at 24.4%! Even their posted default rate is lower!

    I'm paying it off over the next two months, but still.

    I called them to ask for a lower rate, and they said they haven't lowered rates for the past year and would not lower mine.

    Frustrated and mad is an understatement. What can I do?

  • Report this Comment On August 19, 2016, at 7:10 AM, Elisagrace wrote:

    If your's known circle is wide you can get help in finding reputable debt consolidation companies. I was in credit card debt to the tune of $ 2000 and due to my family circumstances and sudden loss of job, it becomes difficult for me to clear the debt amount. I was not in a condition to talk to my creditors. I contacted one of my close friend who is working as credit card counsellor with and discussed the matter with him. He undertook the assignment in his hands and talked to my creditors on my behalf and able to negotiate the amount to $ 700. I paid it once and relieved myself.

  • Report this Comment On September 24, 2016, at 6:38 AM, Kalegley wrote:

    Hi Elisa, I am totally agree with you. This link is very very helpful. Thanks to share with us.

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