Ready, Set, Negotiate

By Sharon Naylor

December 14, 2011 5 min read

If you're finding it hard to pay off your credit card balances, you might be able to speed up the process with just one phone call. According to the credit card information website, the average annual percentage rate on a credit card is 14.9. If this number seems far preferable to the rates that any of your credit card companies charge, you can request to have your APR lowered on each of the credit cards you own.

Seeing as the average household, according to, has $7,000 to $8,000 in credit card debt and many credit companies are raising their APRs even on the accounts of those with good credit scores, it's time to act.

Here are the top tips to help you achieve success in lowering your APRs, including warnings on what not to do or say:

--Gather your most recent credit card statements so that you have your most current balance and APR figures in hand, as well as how long you've been a customer. This puts you and the credit card company on the same page.

--Check your credit report. At, you can request your current credit information from each of the three major credit bureaus (TransUnion, Equifax and Experian) for free once a year. Review these credit reports to check for errors, such as reports of late payments that you can prove were made on time. Cleaning up any mistakes in your credit reports can boost your credit score, helping you earn a better APR with your credit card companies. According to, cardholders with good credit and an APR that's higher than about 12 have a very good chance of securing a lower rate.

--Check sites such as to see what other credit card companies are claiming as APRs, particularly for balance transfers. These numbers will be vital tools in your negotiations with your current credit card company. You'll be able say, "I don't want to have to transfer my balance from your company to another company that charges 8 percent, so I'd like to see whether we can bring my APR down to that figure." Your credit card company would rather keep you as a customer and keep collecting interest from you -- even if it's a lot less.

--When you call each credit card company to request a lower APR, ask to speak to a manager. Customer service representatives can report what the company's current APR offerings are, but they do not have the authority that a manager does to grant you more favorable rates.

--Word your requests with your strengths upfront. LaToya Irby, the guide to credit/debt management, suggests this script: "Hello. I've been a customer for several years. I have excellent credit, and I've been receiving lower rate credit card offers from other credit card issuers. I'm wondering whether you can lower my interest rate to match these offers."

--Be calm, patient and polite as you speak with the manager. Your negotiations will go much more smoothly if you're pleasant to deal with rather than so angry and demanding that the manager won't go to great lengths to please you.

--The manager will review your account history and will let you know whether a new APR can be granted. If you're turned down or offered an unimpressive figure, thank the manager and ask when your account is due for annual review, at which time new APRs may be granted. Call back again at that time.

--Don't close your account out of anger. That could hurt your credit score. You still would have to pay this company your balance and interest until the account is paid off, and credit bureaus would see that you closed the account, thus lowering the amount of your open credit and ending your status as a longtime cardholder. Instead, tell the company that you would otherwise get a balance transfer, again costing the company the income from your interest rates.

--If you're turned down, ask the manager whether you can switch to a different credit card plan, one with a very low introductory APR, plus cash back and other perks. Be aware of introductory APR rate fine print, because the rate may only last a short time and could bump you up into a very high APR upon expiration. However, if this card bumps up to a lower APR than the figure you currently have, this could be a good solution.

--If you're granted a lower rate when you ask, be sure this new APR is permanent and fixed, not variable and not part of an introductory rate that, again, rises in a few months.

--If you decide to do a balance transfer to another credit card, read all the fine print carefully. The experts at warn that balance transfer fees are typically 3 percent of the amount transferred, although some plans may charge even more.

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