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How to negotiate a low credit card rate

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Last editedOct 20202 min read

Businesses of all shapes and sizes are liable to experience credit card debt at some point, but as the debt mounts up, high-interest rates can start having a significant impact on your company's financial health. That's why it's always a good idea to try to negotiate a low credit card rate, if possible. Find out everything you need to know about how to reduce your credit card interest rates and gain access to the lowest credit card rates, right here.

Is it possible to negotiate a low credit card rate?

Firstly, it's important to understand that credit card interest rates aren't set in stone, and you can negotiate a low credit card rate, if you play your cards right. Most credit cards have variable rates, which means that they can fluctuate depending on a range of factors, including the card issuer's discretion. While the issuer is under no obligation to grant you a lower credit card interest rate, they are more likely to be amenable to the idea if your business has a history of on-time payments and a healthy credit score.

What is a reasonable credit card interest rate?

Next question: what qualifies as a "good" credit card interest rate? Ultimately, this is something that depends on a broad range of factors. The best way of working out whether you've got a favourable rate is to compare your credit card interest rate with the average. Then, when it comes time to negotiate a low credit card rate, you should aim for a below-average rate.

How to reduce your credit card interest rates

If you've decided that you need to negotiate a low credit card rate, there are several strategies you can pursue. Here's what you need to do to have the best chance of securing the best credit card rates:

  • Start with your oldest card – If you're dealing with multiple credit cards, it's best to prioritise the card that you've had the longest. Ensure that you let the issuer know precisely why you're seeing a reduction in rates (for example, you've been building your credit and now want to focus on paying off your business's debts). If you've made on-time payments for a significant period of time, be sure to flag this with the issuer; customer loyalty is a serious plus in your favour.

  • Ask for a short-term rate reduction – If the issuer isn't willing to provide you with an indefinite lower rate, it's always a good idea to ask for a short-term reprieve. For example, a one-year rate reduction of 1-5% can have a significant impact on your bottom line. Alternatively, businesses experiencing financial difficulty could ask for a short-term decrease in their credit card interest rates from the get-go.

  • Be persistent – If you haven't had any joy, don't be discouraged. Try again in a couple of months, especially if you've continued to make on-time payments. It can be sufficient to threaten to cancel your credit card if your issuer isn't willing to give you access to the lowest credit card rates, although you should remember that doing so could harm your credit scores.

If you're still unable to reduce your credit card interest rate, it's a good idea to start working on reducing your debt as quickly as possible. A "debt avalanche" approach – wherein you pay off the card with the highest interest rate as soon as you can while making minimum payments on your other cards – can be effective.

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