How to Lower Your Credit Card Interest Rate
5 Min Read | Published: April 25, 2025
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Discover strategies on how to lower your credit card interest rate. Learn how a lower rate may help reduce your monthly payments and save money over time.
At-A-Glance
- Credit card interest rates impact how fast outstanding balances accumulate interest, which in turn affects how big your monthly payments must be to pay off the balance.
- You may be able to ask for a lower rate from your card issuer.
- You can also apply for a new balance transfer card, secured credit card, or another new card to secure a lower rate.
Lowering your credit card interest rate may help you save money on debt repayment and improve financial stability over time.
It’s important to understand why interest rates matter and how they impact your bill. Once you understand how different interest rates work, you can learn strategies to lower your existing rate, or explore the types of new cards you could apply for to secure a better rate.
Credit Card Interest Rates and APRs
Your credit card’s interest rate is best represented by its Annual Percentage Rate (APR), which is the total cost of the stated interest rate plus any fees. This rate matters because it tells you how much you’ll pay in interest if you don’t pay off the card and instead carry a balance. As interest accumulates, your balance grows, which can add even more interest later. This means you’ll need to make larger monthly payments to pay down the balance, and you’ll pay even more as time goes on.
Credit card balances also play a role in calculating your credit score1. A higher balance, especially one close to the card’s limit, could lower your score by impacting your utilization ratio.
In addition, a larger balance can raise your minimum payment. So if you’re carrying a balance by paying the minimum amount, you’ll have to pay more each time to stay current.
The higher the interest rate, the faster these payments can build.
Steps to Lower Your Credit Card Interest Rate
Looking to lower your credit card interest rate? Here are some quick tips:
- Take Steps to Help Improve Credit
A higher credit score can help you qualify for lower rates on new cards and potentially help you negotiate better rates on existing cards. Pay your bills on time, check your reports for errors, and avoid applying too often for new credit. - Pay Off Your Balance
Interest only accumulates on balances after the payment due date. Paying your balance off by that date every month helps you avoid interest. - Reduce Debt-to-Income Ratio (DTI)
DTI measures your monthly income against monthly debt payments. Reducing your DTI by paying down other debts (such as loans) while raising your income may help you obtain better interest rates. - Request a Lower Interest Rate
You can contact your card issuer and request a lower interest rate. However, this is not a guarantee. You may be able to use a long history of on-time payments and good relationship with the lender to your advantage in negotiating a lower rate.
How to Get a Lower Interest Rate on a New Credit Card
In some cases, especially if you have good credit, the most effective move may be applying for a new credit card with a lower interest rate and other more favorable terms.
Here are some options to investigate:
- Balance Transfer Cards
Balance transfer cards typically offer 0% APR for a long period, generally anywhere from six to 18 months2. This could help you consolidate your debt onto a 0%-interest card for easier payoff. However, it’s key to pay it off by the end of the promotional APR period or you’ll start incurring interest again. - Cards With a Lower Interest Rate
Standard credit cards have different APRs for various reasons. Shopping around could help you find a new one with a lower APR, but don’t forget to consider any other features and terms. - 0% Purchase APR Cards
These work like balance transfer cards, but the 0% APR applies to purchases so you can spread the payment over several months. Some find these useful for large purchases, like new furniture during a move. - Secured Credit Cards
These require a cash deposit. The amount you put down becomes your credit line. In exchange, you get a lower interest rate. Secured credit cards could work great for people starting their credit journey or rebuilding credit.
Did you know?
As an added security measure to help protect against fraud, American Express reports a reference number to credit bureaus – instead of your actual account number.
Frequently Asked Questions
Yes, but it’s not guaranteed. A strong relationship with the lender and a solid payment history may put you in a stronger position to ask for a lower rate.
It does not directly affect your score, so you can ask without worrying about credit damage.That said, successfully lowering your rate could indirectly benefit your credit score if it makes it easier for you to pay down your balances.
Balance transfers themselves don’t necessarily harm your credit. Opening the new balance transfer card can temporarily lower your credit, though, like with any new credit application. However, this slight ding wears off after about a year, and the hard inquiry falls off your report after two years3.
The Takeaway
You can lower your existing credit card’s interest rate, but it’s not guaranteed. Improving your credit score and reducing DTI could help you out when asking your card issuer. Otherwise, explore balance transfer cards, lower-rate cards, and other options to reduce high-interest debt and find a lower APR.
1 “Will paying off my credit card balance every month improve my credit score?,” Consumer Financial Protection Bureau
2 “How Credit Card Balance Transfers Work,” Investopedia
3 “Can You Remove Hard Inquiries From Your Credit Report?,” Experian
Bradley Schnitzer is a writer and email strategist who has covered personal finance and small business topics for over five years. He is passionate about personal finance and helping others understand their money.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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