Understanding Credit Card Interest Rates

mixetto / E+ / Getty Images

How to lower your credit card interest rate

There are steps you can take to increase your odds of securing a lower APR — even if you have less-than-perfect credit


If you carry a balance on your credit card, a high APR can make it tough to pay off your debt. But there are steps you can take to increase your odds of securing a lower rate — even if you have less-than-perfect credit. Here’s how.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

If you carry a balance on your credit card, a high APR can make it tough to pay off your debt — particularly if a tight budget is hampering your ability to step up your monthly payments.

If you can’t afford to pay more than $150 a month toward your credit card, for example, a $5,000 balance on a card with a 24 percent APR could take you nearly five years to pay off and cost you $3,323 in interest.

A larger balance would require an even higher minimum payment. An $8,000 balance, for example, might require you to spend $240 a month just to avoid defaulting. You can calculate how long it would take you to pay credit card debt and how much you’d pay in interest using’s payoff calculator.

The average interest rate for a credit card, at the time of writing, is 19.59 percent. However, some low-interest credit cards advertise minimum APRs at 15.74 percent and, in rarer instances, lower than 15 percent. The higher your APR, the more difficult it could be to pay the bare minimum that’s due.

The best way to avoid this scenario is to lower your credit card interest rate. That may sound daunting. But there are steps you can take to increase your odds of securing a lower rate — even if you have less-than-perfect credit.

What is a good interest rate on a credit card?

For credit card interest rates, there is no one-size-fits-all number that is considered good or bad. Your interest rate may be good or bad based on your card, your credit score and your spending habits.

Credit card interest rates have been rising in the past year, thanks to the Federal Reserve steadily raising the federal funds rate in response to rampant inflation. Since the average credit card interest rate is above 19.50 percent, a good interest rate would be anything near or below that.

Those with good or excellent credit would be fortunate to qualify for a card with a regular APR close to the current average rate for low-interest cards, 16.69 percent.

Of course, the best APR would be 0 percent, which you can only find for promotional periods on some cards. It’s important to note that your APR only matters if you carry a balance on your credit card. Cardholders with some card debt will soon regard their APR as a daunting number, as it makes paying off your debt that much more difficult.

How can a lower interest rate help me?

There are many reasons why you might want to lower your credit card’s interest rate. Perhaps you’re applying for a new personal or auto loan, and you want to clear your credit card debt as quickly as possible. If your monthly credit card bill is eating up a large portion of your income, you may have a hard time paying it off. Negotiating for a lower credit card interest rate can make it more manageable.

Or, perhaps you’d like more discretionary income to spend on your new houseplant hobby or pay for tickets to see your favorite musical artist. A lower interest rate could help you better allocate your budget toward your new expenses.

You may also find yourself in an emergency financial situation, like you’ve been laid off or suddenly must manage increased medical bills. In that case, a lower interest rate could help you temporarily cut costs or provide some relief if you need to live on credit for a while.

Whatever the reason, the bottom line is the same: A lower interest rate will save you money, and more of your payment will go toward your principal balance.

How to lower your credit card’s interest rate

1. Take an inventory of your financial health and credit standing

Your best path forward will depend on your monthly income and budget, your credit score, your total amount of debt and your lender’s credit card policies.

If you haven’t done so already, check your credit score to gauge how lenders view your financial health. Your credit history is critical in determining what options are available to you, so don’t move forward until you know where you stand.

Many issuers offer free credit scores. And some, such as Discover and Capital One, don’t even require you to be a customer to get one.

It’s also a good idea to pull a free copy of your credit report from That way, you can check for credit report errors or unauthorized accounts that might be dragging down your score.

Finally, look over your credit card statements and tally all your balances. Then, check the APRs for each open card. The debt on your highest rate card is the most dangerous to your budget, so that’s the card APR and balance you should tackle first.

2. Prepare a strong case for why you deserve a lower APR

Depending on your circumstances, you may be able to strike a deal with your lender to lower your APR. However, lenders’ policies vary, and some may be more willing than others to work with you — especially if you have a long relationship and have been a good customer.

Before you try negotiating with your lender, take some time to dig up information that can help persuade them you’re a trustworthy and profitable customer who deserves a better deal.

For example, write down your current APR, how often you use the card and how much you typically charge. The more regularly you use your card, the more likely a lender may be to try to work with you. Also, note how many years you’ve owned your credit card. If you just recently opened it, a lender may not be willing to lower your rate so soon.

In addition, research other cards and note which ones offer lower APRs. That could come in handy if you want to remind your lender that you can take your business elsewhere. It will also help you avoid hurting your case by requesting an APR that’s way below what others offer.

Finally, look up the U.S. prime rate — the benchmark rate that helps set your APR — and subtract it from your APR. That information could help you argue to a lender that the difference between the prime rate and what you’re being charged is too high.

3. Ask about your lender’s financial hardship policy

You don’t necessarily need a good credit score to convince your lender to give you a break. Your issuer may be willing to lower your interest rate — or work out some kind of alternative repayment plan — if you can demonstrate that you are genuinely going through financial hardship.

Check with your lender to see what kind of policies it offers. Lenders don’t want you to default on your loan, so they may be more willing than you think to work out a plan.

You may also want to consider enlisting the help of a nonprofit credit counselor who can help you go over your financial situation and give you some advice for requesting a lower rate.

You can contact a certified credit counselor at:

If you’re really having a hard time paying your bills and decide to enter a formal debt management plan, a credit counselor will even negotiate with lenders for you. However, unlike basic credit counseling, this service generally requires a fee.

4. Call your card issuer

Once you’ve gathered enough information to argue your case, call your card issuer and politely ask to speak with a representative about lowering the APR on your card. Have notes in front of you and be prepared to bring up your research or additional details about your personal experience if that representative is slow to offer you a better deal.

If you get a no, don’t be afraid to call back another time or ask to speak with someone else. A different representative or supervisor may be more receptive.

5. If you’re denied, consider a balance transfer card

If you can’t get your credit card issuer to lower your rate, then it may be time to move on to another lender.

Cardholders with good to excellent credit should be able to qualify for a balance transfer card with a low or 0 percent introductory APR. Be careful, though: Many balance transfer cards charge costly balance transfer fees (usually 3 percent to 5 percent) and high APRs once the promotional period ends.

If your credit score is low, you may have trouble qualifying for a top balance transfer card. However, there are some cards that offer promotional balance transfer rates to consumers with lower scores.

Bottom line

Don’t let a steep credit card APR put your financial health at risk. You can ask your lender for a lower rate.

The better prepared you are — with notes about your card usage, positive credit history and other key details — the more persuasive your argument is likely to be to lenders. If you are successful in landing a lower rate, don’t forget to get written confirmation of it.

Also, remember that if a lender doesn’t agree to help you this time, you can always try again. Or, if your lender declines to give you a better deal, you can walk away and transfer your debt to a more affordable card.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more