The cost of borrowing money can skyrocket when using a credit card over other types of loans. Paying some fee to borrow money for longer than a billing cycle remains unavoidable in most circumstances and we always recommend paying your balance in full each month to avoid incurring any interest, but for those who need to carry a balance, interest rates can seem less like an inconvenience to avoid and more like a major budget line item to account for.

Cards with high 25% to 30% APRs make carrying a balance an expensive endeavor, but even a 10% APR can be high compared to other forms of borrowing. While it is true interest rates are often fixed, few are immovable. It is possible with some effort to negotiate or renegotiate your interest rate(s). Results may vary depending on your credit history, outstanding balance and other factors, but if you’re prepared and ask at the right time you may stand a good chance of lowering your rate and saving yourself money.

Knowledge Is Power

Assess your credit health before making any big ask of a lender. Typically, a higher credit score equates to lower interest rates. Likewise, income may be taken into consideration when determining your interest rate. Because those with lower income and lower credit scores are seen as higher risk borrowers, card issuers and other lenders will be less-inclined to offer deals—in fact, for many low-income, low-credit applicants even just opening an unsecured credit account with many issuers can be difficult if not impossible.

Ensure your credit report is accurate and up-to-date. Ensure that you haven’t missed any payments within the last twelve months—a history of late repayment may make lenders less inclined to give you an adjusted rate. You’ll also want to ensure you pay down any outstanding debt as much as you can before contacting your lender. Try to shoot for less than 30% of your total credit limit outstanding (also known as your utilization rate).

Even if your credit isn’t excellent, there may still be hope. If your score has recently increased, or your income has grown, you may be in a good position to renegotiate. Conversely, if you’ve suddenly experienced a financial hardship—like an unexpected medical illness or unemployment—you may also be able to get an adjusted rate. Card issuers often advertise understanding in the face of crisis.

Next, identify the rate or rates you’re currently paying. If you have multiple cards, you’ll have to do this for each one. Search your credit statement for “Annual Percentage Rate” (APR). This number reflects a factor of the amount you pay on your outstanding debt each billing cycle. To learn more about APR, read our extensive guide.

It’s also a good idea to ensure you fully understand your own financial position. During any negotiation for a better interest rate, gathering information about your normal income, expenses, total assets and liabilities can help you see yourself the way a potential lender will, which in turn can help you improve your position and become a better candidate for a rate improvement.

Also do some research to understand the market. Check competitor credit cards and see what kind of deals they offer. If you discover a rival company offers a better rate than you currently receive, you may be able to leverage this information when negotiating—even if you don’t want to switch lenders. Other companies pre-approving you for better rates may also be a likely indicator that your credit standing has improved.

Negotiating with a Lender

When you ask for a lower rate, it’s important to have a general idea of what you want to say, so we can’t emphasize enough how important being prepared can be. Once all your information is in order and you have a good idea of what you want —and what you need—you’ll be ready to negotiate. Begin by calling the account you’ve had the longest, as account longevity and history may provide you some leverage. Your bank may recognize you as a profitable customer if you’ve been banking with it a long time.

Be sure to emphasize your stellar repayment record, any better offers from rival companies and/or your unexpected financial hardship. Make your case respectfully, but be firm about your needs. Don’t be discouraged if the rep tells you there’s nothing they can do. Politely ask to be directed to a supervisor and if you’re still told a reduction isn’t possible consider asking for a temporary change. They may be more likely to allow a temporary change, which may help you find a better option or a new company to do business with.

As a last resort you may suggest you will close your account if you do not receive a lower rate. This is not a threat to make lightly, as you still have to pay any outstanding debt before you can close an account. If your card has a large outstanding balance, this tactic won’t hold much weight at all.

Balance Transfer as an Alternative to a Lower Rate

For credit cardholders facing carried balances with high interest rates, a balance transfer card option may help reduce a rate or, with the right account, provide a few months of reprieve from interest altogether. A balance transfer moves a balance to a new card—ideally with a lower interest rate. There is often a balance transfer fee from a new card issuer, but many issuers offer 0% introductory APRs on balance transfer for a few months to attract customers trying to dig themselves out of debt. To learn more about how to do a balance transfer, read our guide.

Also check out our list of the best balance transfer cards.

Bottom Line

If you maintain good credit and a clean payment history you can often be granted a lower interest rate. Even if you don’t, don’t give up. Continue to make payments on time, reduce outstanding debt and make a plan to try again in three to six months. Improving your credit health will help you make your case next time. People like to help people who help themselves, and credit card companies want your business. If you give the company a profitable reason to help you, it will often do so. It’s just a matter of ensuring you’re in as strong a position as possible when you make your ask.