A guide to lowering credit card interest rates

Credit card interest rates are straining budgets right now. According to Federal Reserve data, the average hit 21.76% in late 2024, with business cards often carrying similar or higher rates.

Here's what that means for your bottom line: A $50,000 corporate card balance at 23% APR incurs $11,500 in annual interest charges. That's a salary, new software licenses, or marketing budget disappearing into bank profits instead of driving business results.

However, you don't have to accept whatever rate your card issuer assigns you. Interest rates aren't carved in stone, and there are proven strategies to bring them down, which we’ll explore.

What is a credit card interest rate?

A credit card interest rate is the cost your business pays to borrow money from the card issuer, expressed as an annual percentage rate (APR). When your company carries balances month to month, the issuer charges this percentage on unpaid amounts.

How business credit card rates are calculated

When the Federal Reserve adjusts rates, your credit card rates typically follow within a few billing cycles. Your business APR includes the prime rate plus an issuer margin, normally ranging from 10% to 18%, depending on your company's creditworthiness.

Credit card companies calculate interest daily, not annually. They divide your APR by 365 days, then multiply that daily rate by your balance each day. This daily compounding means balances grow faster than many finance teams expect, especially when you're juggling multiple vendor payments and project expenses.

Business card APRs appear as ranges like "16.99% to 24.99%" because issuers assign rates based on your company's credit profile, revenue, and financial history. Companies with strong business credit land at the lower end, while newer businesses or those with credit challenges get pushed toward higher rates.

The key insight for finance teams: your current rate isn't permanent. Your issuer assigned it based on your company's financial picture when you applied, but that picture can improve—and so can your rate.

Why credit card interest rates are so high right now

Interest rates stay elevated despite Fed cuts because of these three market shifts:

• Wider bank profit margins: Where corporate rates traditionally moved with prime rate changes, issuers now add much larger margins above base rates. When the Fed cuts rates, banks pocket the difference instead of passing savings to your business.
• Aggressive risk-based pricing: Banks scrutinize everything about your business—age, industry volatility, recent credit inquiries, even customer concentration. This pushes more companies toward higher APR ranges regardless of payment history.
• Economic uncertainty pricing: Supply chain disruptions, inflation concerns, and market volatility get baked into your interest rate. Banks prefer higher margins over risk during uncertain times.

6 proven ways to lower your credit card interest rates

Finance teams can immediately reduce corporate card interest costs through these strategic approaches, which target business credit profiles and lender relationships.

1. Call your bank and negotiate

Your banking relationship carries more weight than you realize. Corporate card issuers need your business more than they let on, especially if you've been paying on time and maintaining healthy account activity.

Gather enough context before calling: your business credit score, payment history, and competing offers from other banks. Your revenue growth or improved cash flow since the original application strengthens your position.

Skip general customer service and call your business banking team directly.

Present your case like the business decision it is: "We've been reliable customers for X years, always pay on time, and have received competing offers at lower rates. What can you do to keep our business?"

Success rates for corporate negotiations run much higher than consumer requests because your account represents serious revenue.

2. Build credit that unlocks better rates

Your business credit score directly controls what rates you qualify for.

Focus on what moves the needle fastest: Pay all business bills early, not just on time. Keep credit utilization below 30% across all business accounts. Build trade credit relationships with suppliers who report to business credit agencies to help build business credit.

Monitor your business credit through Experian Business, Dun & Bradstreet, and Equifax Business. Dispute errors immediately since they're costing you money every month they remain.

A 50-point credit score improvement typically drops corporate card rates significantly, improving cash flow.

3. Transfer balances and eliminate interest temporarily

Balance transfer cards offering 0% APR promotional periods give you free money by eliminating interest costs.

Corporate balance transfers typically offer 12 to 18 months of zero interest charges for qualified businesses. Every payment goes directly to the principal, rather than interest, accelerating the payoff.

A $100,000 transfer with 3% fees costs $3,000 upfront but saves $20,000+ in interest if you were paying 20% on existing cards.

Calculate realistic payoff schedules before applying. If you can't eliminate the balance before promotional rates expire, you'll face regular rates that might match your current cards. Apply when your business credit profile is strongest.

4. Consolidate expensive debt to cheaper rates

Business term loans often carry fixed rates well below corporate card rates, making them powerful tools for debt consolidation. Qualified companies can typically access significantly lower rates through term loans compared to carrying balances on corporate cards.

Strong consolidation candidates have consistent revenue, solid business credit, and enough debt to justify origination costs. Most lenders prefer consolidating substantial business debt to make the loan economics worthwhile for both parties.

Shop multiple lenders, including banks, credit unions, and online platforms, to compare rates and terms. Use loan proceeds to pay off corporate cards immediately, then focus on the single loan payment with predictable monthly costs.

5. Join credit unions for member-exclusive rates

Business credit unions offer corporate card rates 2% to 4% lower than traditional banks because they prioritize member benefits over profit margins, according to America's Credit Unions.

Membership requirements are often broader than expected: geographic location, industry associations, or employee group affiliations. Some accept businesses through chamber of commerce membership or small donations to affiliated charities.

Credit unions make relationship-focused lending decisions rather than relying purely on automated underwriting, making them an excellent choice for reducing credit card debt.

6. Turn competition into negotiating power

Business card issuers compete aggressively for corporate accounts. Use this competition to force better terms from your current bank.

Research competing offers and present them during negotiations: "Bank XYZ offered us 14.99% APR. Can you match this to keep our business relationship?" Corporate representatives have more flexibility for rate matching because business accounts represent higher value relationships.

If rate matching isn't possible, ask for alternatives like bonus rewards, waived fees, or temporary reductions. These provide value even without permanent APR changes.

How to choose credit cards that solve more than interest problems

Fighting interest rates is just one piece of managing corporate spending effectively. Evaluate corporate credit cards on these six capabilities that impact your finance team's daily work:

• Interest structure beyond promotional rates: Some corporate credit card programs eliminate interest entirely, freeing your team from ongoing rate negotiations and budget surprises from variable rates.
• Expense automation that eliminates manual work: Good cards eliminates manual expense management by capturing receipts automatically, categorizing transactions by merchant type, and syncing directly with accounting software without requiring data entry.
• Real-time spending controls that prevent overruns: Set limits by employee, department, or project category. Approve or decline transactions instantly rather than discovering budget problems during month-end reviews.
• Built-in approval workflows: Ensure purchases align with company policies before charges hit your account, preventing the surprise expenses that often lead to carried balances.
• Financial visibility for better decisions: Detailed analytics show spending patterns, vendor usage, and cash flow trends that help identify cost-saving opportunities.
• Seamless system integration: Direct connections to QuickBooks, NetSuite, and other platforms eliminate manual data transfer and reduce setup complexity.

Eliminate credit card interest with Ramp

For finance teams tired of fighting rate battles every few months, consider ending the game altogether.

Ramp's corporate cards offer zero interest charges while providing sophisticated expense management, real-time controls, and seamless accounting integration. Your finance team gets better tools while your company stops paying banks for the privilege of borrowing money.

Ramp connects directly to QuickBooks, NetSuite, and other popular accounting platforms, eliminating the need for manual data entry. Set spending limits by employee and department in advance to improve cash flow forecasting and prevent budget overruns.

Take action now. See how Ramp's interest-free corporate cards can eliminate borrowing costs while streamlining your finance operations.