A few years ago, I was overwhelmed with medical bills after a long hospital stay. My savings ran dry, so I had to use my credit cards to cover expenses. With high interest rates — mine was about 15% — my balances ballooned out of control.

Fortunately, I had been a good customer with my credit card company for over a decade and had never missed a payment. I made a phone call and spoke with a customer service representative and successfully negotiated a lower interest rate, which helped me save a significant amount of money. 

My situation isn’t unique. Millions of Americans struggle with credit card debt. According to Experian, one of the three major credit bureaus, the average American carried a total credit card balance of $4,293 as of the third quarter of 2018. Some cards hit you with sky-high interest rates — many over 20% — which can add hundreds or even thousands of dollars to your balance. 

If you’re carrying a credit card balance and want to save money, lowering your credit card interest rate can help. 

How a Lower Rate Affects Your Balance

You might not think that researching your options and lowering your credit card’s annual percentage rate (APR) is worth the effort. If you can get a rate that’s just one or two percentage points lower, does that really make a difference? 

You might be surprised by how much even a modest rate reduction can affect how much you repay. For example, let’s say you have a $20,000 credit card balance at a 15% APR with a minimum monthly payment of $200. It would take you over eight years to repay your debt, and you’d wind up paying a total of $31,535. The interest charges alone would cost you more than $11,000. 

By contrast, pretend you were able to lower your APR to just 13%. You’d erase the $20,000 debt five months sooner, and you’d repay just $29,186. Taking just a little time to score a lower rate would help you save more than $2,000. Of course, an even lower rate would result in even more dramatic savings. 

 Credit card with 15% APRCredit card with 13% APR
Original balance$20,000$20,000
Minimum payment$200 a month$200 a month
Length of repayment8.8 years8.3 years
Total interest paid$11,535$9,186


3 Ways to Reduce Your Credit Card Interest Rate

If you have high-interest credit card debt, you know how important it can be to lower the APR. You can try these three ways to reduce the interest rate on your credit cards.

1. Negotiate a lower rate

As I found out, one of the easiest ways to lower your APR is to negotiate with your credit card issuer. If you’ve been a customer for more than a few months, they’re likely to work with you to prevent you from going to a competitor. Follow these four steps: 

  • Make consistent payments: You have more power during negotiations if you have a solid credit history with no late fees or missed payments. Be sure you make all of your payments on time, even if you can pay only the minimum. 
  • Boost your credit score: You’re more likely to qualify for a lower rate if you increase your credit score. To do so, reduce your debt as much as you can and make all of your payments on time. 
  • Research other credit cards: Look for new credit cards that offer more favorable terms, such as a lower APR, so you can point to specific examples from competing credit card companies.
  • Contact your credit card company: Call the card issuer’s customer service number and explain the reason for your call. Emphasize that you’ve been a loyal customer, have good credit and have been researching alternatives that offer lower APRs. Ask whether they’re able to lower your APR to match or beat the APRs of their competitors. Chances are, the company will give you a lower credit card interest rate to keep you as a customer. If you aren’t getting anywhere, ask to speak to a manager before giving up.

2. Complete a balance transfer

In some cases, the credit card issuer might not offer a lower APR. In those situations, you might try a balance transfer instead. A balance transfer is when you move your credit card balance to another card with a lower APR.

Some credit cards even offer promotional APRs, where you can get a balance transfer rate as low as 0% for a set period — often 12 to 18 months. That promotional period gives you time to reduce your balance without worrying about interest charges piling up.

Once you find a card that works for you, submit your application. If you’re approved, contact the issuer of the new card to complete the transfer of the balance from your higher-interest card.

3. Consider a debt consolidation loan

If the above options don’t work for you, one alternative to consider is a debt consolidation loan. With this type of loan, you take out a personal loan for the amount of your credit card balances, using the loan to pay off your credit card balances. Going forward, you’ll have one fixed payment.

A personal loan tends to come with a much lower APR than a credit card does, so you can save a lot of money through debt consolidation. Plus, a debt consolidation loan has a set repayment term, so you’ll know exactly when the balance is scheduled to be paid off.

However, debt consolidation may affect your credit score, so make sure you consider both the pros and cons before proceeding with this option. 

Bottom Line

When it comes to high-interest credit card debt, it’s easy to feel like you’re drowning. If you’re struggling with credit card debt, lowering the APRs of your cards can provide some relief.