What to Say to Lower Your Interest Rates

Asking for a lower interest rate on your credit account works more than 50 percent of the time, according to a March 2002 survey by the U.S. Public Interest Research Group (PIRG). You can improve your chances of success by researching your credit options and evaluating your credit history.

Why Creditors Care

Your creditors profit from the interest on your accounts, so their goal is to keep your business. In fact, it can cost a credit company several hundred dollars to find another customer to replace you, according to Bankrate, a website that helps consumers compare rates on financial products and services.

The PIRG survey found that you can reduce your interest rates by as many as 10 points just by calling your creditor and asking. Consumers in the study who succeeded had typically been with the company for four years but even if your creditors say no now you can ask again later.

Considering Competitors

If you call your creditor to say that you're considering taking your business elsewhere, the representative is likely to ask questions to figure out why. This can work to your advantage if you compare other creditors before contacting yours and cite at least one creditor that offers lower interest rates than you currently pay. Your creditor may be willing to lower your interest rate to one equal or lower than what the other company offers, to keep your business.

More Than Minimum Balance

Your creditor may offer you more favorable interest rates if you've shown yourself to be a valuable customer in the past. One way to do this is by paying more than the minimum monthly payment due on your account, according to the BCS Alliance credit help resource.

Doing this reduces your account balance more quickly, decreasing the chance that you'll fall behind on payments. In the case of credit card accounts, it also decreases your debt relative to your available credit, which increases your credit score. A representative of your credit company should be able to view your account information to determine how much you pay when your balance is due.

High Credit Score

Your credit score can affect the interest rates you pay on your accounts and if your credit score has increased since you opened your accounts you may be able to get a lower rate. Request your credit score from one of the three major reporting agencies, TransUnion, Equifax and Experian. If your credit score is at least 700, contact your creditor to let them know. You can raise your credit score by making credit payments on time, having a low debt-to-credit ratio and having a long credit history.