Ask Jean: Credit Card Interest Rates - Jean Chatzky - Making money make sense
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Ask Jean: Credit Card Interest Rates

mailbagmondayHi Jean,

I’ve watched you on TV for many years and I love your money advice!!  I put a budget/plan in place about a year ago to pay back about $20,000 in credit card debt. My strategy is to pay more than the minimum on the highest interest card as well as calling each company every 5-6 months asking for an interest rate reduction.

What has prompted me to write to you today is a phone call I made last night to my Citi MasterCard. It’s my highest balance and highest interest rate card of 15.22%. In the past year I’ve called twice have that reduced from 19.99%. The man said he was looking into “a couple of programs” to see if the interest rate could be reduced. The first “program” was a minimal reduction, he didn’t say what that reduction would be. He looked at a second “program” and said wow, this one is much better. I can lower it to 9.22%!!

My question is how can these credit card companies be so arbitrary in their charges for repaying debt? The last phone call I made 6 months ago to that same card only got me a .25% reduction. How long was I really eligible for the “program” that allowed my interest rate to be lowered to 9.22%?

Thank you so much for your time!! Look forward to hearing what you think about this!!



Hi Marcia,

This is tough, because it does seem very arbitrary on the surface (and it may, in fact, be a bit arbitrary, because in my experience, it can really depend on who you talk to. If at first you don’t succeed, try, try again – and ask for a supervisor.).

But I called Citi to find out more about their process for lowering interest rates. This is what they told me:

“We work hard to earn our customers’ business every day and respond to their feedback. If a customer is interested in an APR reduction, they should call the number on the back of their card to contact a service representative. Based on a number of factors like their payment history and credit profile, the customer may be eligible for an APR reduction. In addition, APRs available for any customer may change from time to time based on market conditions.”

I understand that you’ve always had a favorable payment history, but it could be that you paid down enough of your balance between those two calls to be eligible for the “program” the representative told you about. Or it could be that you landed with a representative who was willing to do a bit of digging to find out what was available rather than dismiss your request.

It’s frustrating, I know. But here’s another option, if you don’t feel like going through this song and dance every six months: You can always do a balance transfer, if you have the credit score to get approved for another card that is offering a promotional rate. has a laundry list of credit cards that are currently charging 0% interest on balance transfers – many for a year or 15 months. Pay attention to the balance transfer fee – the first card on the LowCards list, Slate from Chase, doesn’t carry a transfer fee, but generally they can average around 3% – and make sure that you’ll be able to pay off that balance before your rate jumps, because you could end up with a higher rate than you have now (truth be told, 9.22% is pretty good).

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