Be a tough cookie – Ways to negotiate for a lower credit card interest rate and fees

Last updated: 11 April 2018

Got a credit card and never knew that you can negotiate for a lower interest rate to save on interest charges? Or lower fees to get out of debt faster and maximise your rewards points? With a little luck and a few simple negotiation skills you may be able to do something about it.

Before picking up the phone to negotiate a lower rate, we recommend you follow the steps below and assess your credit health and collect the relevant information that might be able to help you in the negotiation process.

Believe it or not, sticking with a card you already have — and negotiating a lower interest rate on that card — is usually better than getting a new card with a lower rate. You can’t run from your credit history, and every time you apply for a new card, the enquiry into your credit history can ding your credit score, which in turn can lead to higher interest rates.

It’s a vicious cycle which is not good for your credit reputation.


A pro negotiator will prepare the below

  • Your past credit card statements and payment history
  • Copies of credit card offers you’ve received
  • Any other pertinent details that you can assemble to help strengthen your case (your credit score, income and expenses etc.)
  • Be persistent and polite


Let’s get down to business


 1. Evaluate your current credit situation

Start by finding out how much interest you are paying, your credit card terms, statement due date and current balance. Basically, the ins and outs of your credit card statement.

If you have illustrated a perfect repayment history over the years, credit card issuers will assess your request as less likely to impose risk to the company hence putting you in a good credit position. Having a strong credit history may indicate you’re likely to repay your balances and what you owe, so credit card companies may be more willing to meet your requests.


2. Get your credit score and build it first

The best way to start is to get your credit score and monitor it regularly. If there are areas that you have identified that needs improvement, action them as soon as possible. This way you will look more favourable to the credit provider as you have a healthy track record and a high creditworthiness.

Sign up to Credit Savvy to get alerts to notify you of changes on your credit file and learn about the ways you can improve your financial wellbeing.

Our Learning Hub features articles on ways to improve your credit score and to understand how your credit score is calculated.


3. Research & compare

To negotiate for better credit terms, research is key and is an unavoidable process in the search for a ‘lower rate’ credit card you’re after.

Being prepared sets you up to conduct a better evaluation of the different credit card offers out there.

Check out our credit card comparison service to help you find better deals on credit products.


4. Competitor name-dropping

Use what you have researched on competitors and use the competing credit card offers as leverage when you negotiate. At the end of the day, credit card companies want to secure new business or retain existing customers. That means they need to stay competitive with their rates.


We won’t conclude this article without some Savvy Tips:

# Is there a good time to make the call? Yes, there is. Once you have completed the steps above and you feel confident – Pick up the phone and dial the customer service number.

# Don’t give them your preferred rate but ask them what is the best rate they can offer you instead. They might offer you a lower rate compared to your preferred rate!

# Ask the credit provider to waive the annual fee instead, if they can’t provide a lower interest rate.


Success comes from failing

Don’t let one failed attempt put you off – try again. There’s no limit on how many times you can try. The benefit of multiple attempts is you get to speak to a different representative or even a supervisor who has a higher level of authority to provide a better offer.

Ask the representative what other ways will put you in an optimal position to lower your rate. In some cases, they might ask that you make consistent payments on your card for a few months before they can offer you better credit terms or lower rates.


Remember, the negotiating power lies in you, so be proactive in this process and don’t be afraid to ask the question! You never know, the decrease in rate might help you to save more money than you think!