Studies Show That Most APR Reduction Requests Are Approved

If you don’t ask, you’ll never know. This expression applies to everything from job raises to loan applications. It is also very relevant to ask your credit card company for a lower interest rate. A recent survey by Lending Tree found that seven out of ten credit cardholder requests to lower the account interest rates were granted.

How can you get a lower interest rate on your current credit card accounts?

To request a lower interest rate on your credit card account, submit a request to your credit card company via your internet account or by phone with a customer service representative. Card company representatives usually work to grant requests that satisfy their customers.

According to the figures, securing a lower interest rate is much easier than most consumers would suppose. Additionally, successful requests for concessions from credit card companies include much more than just lower APRs. Cardholders struggling with annual fees or wanting higher credit limits far more often than not found their requests accepted by their card company. Let’s consider the basics of how to request these concessions and ideas for increasing your chances of securing them on your account.

Asking for a Lower APR

In 2022, consumers have a very high chance of getting a lower interest rate on their credit card if they ask for it from their credit card company. Lending Tree found that 70% of such requests were successful in 2022. With the average variable credit card interest rate currently hovering just above 16%, and $3,545 being the average credit card debt per American adult carrying a credit card balance, any reduction in that rate granted by the credit card company could save the consumer hundreds of dollars a year in interest, or even thousands over the coming years.

Approvals Might Be Declining But Remain High So Far in 2022

While 70% already seems like a pretty high percentage of requests granted for lower interest rates on credit card accounts, that figure is actually down quite a bit from 2021. Last year, over eight in ten (83%) credit cardholders who requested a lower credit card in 2021 found their APRs decreased.

As the economy (and credit card companies) try to put the economic cliff of April 2020 further in their rearview mirror, it should not be surprising that businesses may be trying to come out of their COVID-survival mode. Instead of saying “yes” to any consumer request just to keep the customer from bankruptcy or, worse, from running to a competitor, credit card companies must be feeling a little more confident in their ability to retain customers.

While that may not be so great in terms of customer service or consumer benefits, it might bode well for the overall economy as businesses re-establish their financial footing.

The good news, though, is that the average APR reduction ended up around 7 percentage points below the cardholder’s APR before the requests. If the consumer had an average APR of 16% on their card, it was 9% after their request was granted. Single-digit APRs are always better than double-digit interest.

Other Credit Card Concessions

Lower interest rates aren’t the only requests consumers reach out to their credit card companies for. In fact, most other concessions either experienced a smaller decrease compared to last year or even increased in their granting over a year ago.

Annual Fee Waivers and Reductions

Credit cardholders tired of paying annual fees for the privilege of carrying plastic around in their wallets found the most successful of all cardholders when it came to extracting concessions from their credit card companies. Nine out of ten requests for annual fee waivers and reductions from these companies were granted according to the Lending Tree survey.

Even though this was down from 92% a year earlier, the success rate should encourage any cardholder paying an annual credit card fee to reach out to their card companies. Ideally, you should submit your request before the fee is due rather than trying to have it credited to you after your card company charges you the fee.

Higher Credit Limits

One concession that saw an increase in its successful requests compared to 2021 had to do with the cardholder’s credit limits. Those who requested higher credit limits on their accounts this year found more success (84%) than those who made such requests last year (83%).

This increase makes complete sense as our economy improves. Even the increased inflation of late 2021 and early 2022 has put pressure on consumers to increase their credit card limits.

Of course, the downside to this increase involves its potential to lead to greater credit card debt.

Changed Payment Due Date

For years, we have taught learners in our classes that they can reach out to their credit card companies and request a change in their payment due dates. Successful request rates over the past year rose from 66% to 73%.

Keep in mind, though, that while you might find success in moving your payment due date back in the month (a good idea to make it match better with your paydays), you will find much less success (if any) in asking your credit card company to move your due date from one month to the next.

Balance Transfer Fee Waivers

Another credit card company concession that increased in success from last year to this year involved balance transfer fee waivers. If you are attempting to lower the amount of interest you pay or consolidate the number of credit card payments by transferring your balances to a new card, you might first reach out directly to the new card company and ask for a waiver of the typical 2% to 3% transfer fee.

If you are transferring $5,000 to a new card, getting a 3% fee waived will save you $150 right off the bat. If you’re attempting to save money in interest, that would be the equivalent of getting a half percentage point off your APRs.

Foreign Transaction Fee Waivers 

For anyone who travels outside the US, having a credit card with no foreign transaction fee can make a huge difference in the cost of their trip. If you have a credit card you feel particularly loyal to but that charges foreign transaction fees, you might consider asking them to waive those fees before your next journey.

Up from 53% of the time last year, cardholders making such a request this year found their demands met 58% of the time. While that is barely better than being successful half of the time, that statistic indicates that such requests are infinitely more successful than those who don’t make the request in the first place.

Late Payment Fees

Much more successful were those cardholders who asked their card company to waive their late fees. Like bank account holders who request waivers of over-draft fees the first time, cardholders will find their requests granted most of the time if they’ve incurred a recent late fee they would rather not pay.

Although down from 86% last year, an overwhelming 82% of requests for late fee waivers were granted by credit card companies. This high statistic should encourage anyone who incurred a late fee to reach out to their credit card company to ask them to remove it from their account.

Cash Advance Fee Waivers

The least successful of all concession requests on the Lending Tree survey had to do with cash advance fees. Although up 8 percentage points this year over last year, still barely half of such requests were successful at just 53%.

The riskiest of any credit card transactions for the card company, cash advances don’t provide these businesses with any leverage should the transaction go poorly or the cardholder fails to repay the cash loan. There is no merchant to work with to figure out how to minimize such possibilities in the future. Instead, the card company would just be out of luck when it comes to the cash they advanced the consumer.

Cash advances on your credit card will set you back not only with the typical 3% to 5% fee but also with the far higher-than-normal interest rate. Most APRs for cash advances are nearly ten percentage points higher than those on standard purchases.

If your circumstances are such that you feel a cash advance is your best option, then, by all means, ask your credit card company for a waiver of the fee. It may only be $30 to $40 on a $500 advance, but in the end, it works out much better than a payday loan, a car title loan, or a pawn loan whose fees equate to APRs in the 100% to 500% range.

If you find you can’t get your credit issuer to budget on your APR percentage, and you are struggling with repaying your balances, you may want to consider consolidating your credit card debt. This process is fairly straightforward in that you’ll want to contact a nonprofit credit counseling organization, such as Money Fit, to review if a debt management plan is in your best interest.

Related Questions

Does asking for a lower interest rate affect my credit score?

Requesting a lower credit card interest rate will not have any effect on your credit score. Even if the company pulls your credit report, it will be coded as an account review, not a hard inquiry. In fact, whether you have a high or low APR has no effect on your credit scores.

When should you ask for a lower interest rate on your credit card?

The goal of any consumer looking for a loan or credit card should always be to find the best loan terms with the lowest interest rates. If you have a recent history of on-time monthly payments to your credit card company, you should consider asking for a lower interest rate.