lower credit card rates

February 05, 2002


by Mark Owsley, J.D.


I have been asked whether one can actually negotiate a lower rate from his credit card provider. The answer, usually much to the amazement of the questioner is, "absolutely !"

"But why," they often ask, "would a bank or credit-card issuer lower your interest rate ?" "I mean," they exclaim, "they've already published the rate and you've already agreed to it !"

"True enough." I continue, "But that is one of the reasons why they just might lower your rate - because they want you to keep on agreeing to be a customer." Surely if you have even one credit card, you receive interesting offers for other cards in the mail quite frequently. Sometimes, it seems like a daily ritual just to cull through the credit card offers that come in the mail. Think of it - all those companies are soliciting your credit card business. Make no mistake - even the low rate cards make a profit - even after you factor in the small percentage of folks who pay off the card entirely each month. So, credit cards are big money makers and the industry is quite competitive. No, that's an understatement. The industry is fiercely competitive.

Which leads us back to our original question, negotiating for a lower rate. Let me tell you one personal experience. A few years back, one of my card providers raised its rates. The increase was not due to something I did or did not do - this particular issuer just effected an across-the-board increase on customers holding my type of card. Being otherwise occupied, I actually ignored the increase for two or three months. Then I began to steam over the new rate and what it was actually costing me in real dollars. So, I decided to give it a try - I called the issuer - let's call them Greedy Card Company, and asked them to lower my rate. They refused. Refused to even discuss the matter. Even when I gingerly reminded them that I got new offers every day in the mail and could go elsewhere. By the end of the conversation, I was doing a little more than simply "gingerly" reminding them. I could not believe their arrogance, which was apparently an institutionalized problem.

On the heels of that conversation, I began to look for a new provider. I considered the other card I had in my wallet. Greedy Card Company was now charging about 5% more than the other. We'll call the other company, Nice Card Company. I considered the fact that Nice Card was still available at a low rate and called them and asked about another card with them. I explained the entire ordeal, how I had excellent credit, but that Greedy Card Company had raised the rates and would not negotiate a better deal. Nice Card representative told me that the option of another card with them was not available, but - get this - on his own initiative, he offered to lower my rate with Nice Card even more ! I had not even requested this, in that I thought Nice Card was already giving me a pretty good rate. Yet, this representative had the inclination and the authority to lower my rate immediately, just to make a happy customer even happier.

I still have my Nice Card today. And Greedy Card ? I found another issuer with a rate comparable to Nice Card and transferred the balance to them within days.

You absolutely CAN negotiate for a better rate. It never hurts to ask, and if you get lucky, they may even volunteer !

Mark Owsley holds a Juris Doctorate, is a practicing attorney who has practiced for 18 years in the finance and credit areas of the law. He is also an Internet enthusiast/entrepreneur, maintaining several web sites, including