How to Get Your Credit Card Rate Lowered in 5 Steps

It may take several phone calls to negotiate a truly fair APR with your credit card company.

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One of the biggest benefits of maintaining good credit is access to the most competitive interest rates on everything from loans to lines of credit. However, even good credit doesn't necessarily guarantee you the lowest possible credit cards rates. The reality is that it may take a phone call (or several) to negotiate a truly fair APR.

If you think you deserve to have a few percentage points knocked off your current credit card rate, follow these five steps:

[See 50 Ways to Improve Your Finances in 2012.]

1. Set realistic expectations. It is possible to negotiate a lower interest rate with a creditor, but only if your request is reasonable. Ask for a double-digit reduction and your request will likely be greeted by laughter or a dial tone.

You don't need a significant rate reduction to save on your credit card bill. Even just a couple of percentage points will make a difference, so determine an APR you think is realistic and negotiate from there.

2. Start by asking. Often, the negotiation process is as simple as asking your creditor for a reduced rate. Sometimes it works, sometimes it doesn't, but the credit card industry is fiercely competitive and your card company will do all it can to retain you as a customer.

The best way to ask is to explain that your loyalty to the credit card company is dependent upon having your rate lowered, then end with "What can you do for me?" or "How can you help?" rather than throwing out a number immediately. Who knows? You might end up with an even better rate than you expected.

[See How to Complain to Companies (and Get Results).]

3. Reference competitors. If your request is countered with a rate that's still too high, or even a simple "No," it's time to bring out the big guns. Remind your creditor of the competition out there that's vying for your business and sending you offers in the mail. Make sure you have some of that junk mail in front of you as reference. You can also try asserting that a particular competitor offered you the rate you want, then ask your current credit card company to beat it. You might have to stretch the truth a bit--it's up to you whether you want to try this tactic.

4. Be persistent. Don't end your efforts if you're unsuccessful after the first try. Sometimes it's a matter of speaking with the right person--the customer service representative who first takes your call probably won't even have the authority to change your rate. Work your way up the food chain until you reach the person who can meet your needs. Often, it's a matter of getting to a supervisor or someone in the corporate offices.

[See 7 Costly Credit Card Mistakes.]

5. Move on. In the end, there is no guarantee these strategies will work. You may find that the only way to have your credit card interest rate lowered is by switching to a new company.

It's important to remember that the better your credit and payment history, the more successful you'll be in securing a rate reduction. Credit card companies want to hold onto their best customers, but they're going to be far less accommodating for high-risk cardholders who consistently miss payments or have collection agencies after them.

If you hit a wall in your search for a lower rate, it may be time to focus on yourself instead. Examine your credit standing and whether you really, truly deserve a lower credit card rate. Your efforts may be better spent improving your credit situation now so you can ask for (and receive) the best rates in the future.

Casey Bond is editor-in-chief of www.GoBankingRates.com, which provides readers informative personal finance and investing content, as well as the best interest rates on financial services nationwide.