Did you notice that you are paying a huge interest rate on your credit card and you’re wondering if you can lower it? That may be possible with the right strategy. But before picking up the phone to make that call negotiating your interest rate, it’s useful to do some research and prepare. 

Here is how to prepare for requesting a lower interest rate on your credit card.


Get familiar with the numbers

Before even thinking about negotiating a lower interest rate for your credit card, check your billing statement and get familiar with the numbers. 

You’ll want to be aware of your payment history and your interest rates and other fees. Your billing statement will contain all this information and a lot more, such as your minimum payment, late fee, and contact information of your credit card issuer. While it may be a long document to go through, make sure to read everything. 


Improve your credit score

One of the factors that can play in your favor when negotiating your interest rate is your credit score. 

A credit score is a three-digit number ranging from 300 to 850 that predicts how likely you are to pay your bills on time. This score is based on your payment history, debt level, credit history, and credit inquiries. 

Usually, people will only check their credit score when preparing to request a loan. However, being aware of your credit score at all times is very important. The higher your credit score, the better. Generally, a credit score over 670 is considered good while over 740 is very good. 


Lower your debt to income ratio

Your debt to income ratio is another factor to consider. This means how much you owe compared to how much you earn. The lower the percentage, the better. Generally, a ratio below 36% is considered good. 

Your debt to income ratio can decrease when you get a raise on your salary or finish paying off a loan. Keeping this in mind, you can time your request for a lower credit card interest when your debt to income ratio gets lower. You can easily calculate this percentage online with your total recurring monthly debt and your gross monthly income. 


Gather competing offers

Having a competing offer to present when negotiating your interest rate can help a lot. Credit card issuers don’t want to lose good customers.

Before your call, make sure to have at least one concrete offer from another credit card issuer. This should include details such as the APR that the new company may offer you. One place to start is your promotions emails folder where you may receive new offers from competing credit card companies. 


Negotiate your interest rate

Once you’ve done all your research, it’s time to make the call. Make sure you have all the numbers handy, be polite, and explain the reasons why you believe you are a good candidate for a lower rate. It’s important to be persistent and not give up right away, always in a polite manner. If the person who gets your call can’t help you, ask to talk with someone else who can.


If you get a no, take it as a chance to improve

Don’t get disappointed if you get a no. It may take a few tries before you obtain a lower interest rate. If they deny your request, make sure to ask the reasons why. This way you’ll know what you need to work on to improve and try again.