credit card company won't lower interest rate

[jlcx]

OK, Mustachians, here is the question to which I've been unable to find an answer: how do you get a lower interest rate from a credit card company that is refusing to give you one for no obvious reason?

-25 years old, recent credit score 787 (Equifax), $12,500 student loan debt, no other debt now.
-problem card is a  Barclaycard Rewards Mastercard at 19.24%; I've had it since early 2008.
-Total debt peaked a year ago at around $22,500, including $5800 ($6800 limit) on the Barclaycard
-Called Barclaycard 10 months ago about interest rate reduction; was refused.
-Over the next 2 months, I paid down the balance to around $2600.
-In this time, other card issuer (Capital One) reduced my rate to 14.9% without being asked
-Called Barclaycard 2 months after the first time; mentioned much better rate on other card; said I would transfer my balance
-Was again refused a rate reduction; transferred balance to other card.
-Over next 8 months, I used the Barclaycard and paid it off every month.  I gradually paid down the Capital One to $0.
-Last month, I called Barclaycard again about a rate reduction and was refused again but given rewards points for not closing the account.  They never give me any reason for the refusal, just conventional wisdom that I already follow pretty well.
-On impulse, I applied for a Discover Card; got $8000 limit at 17.99% (after intro)

OK.  So how do I get the clowns at Barclaycard to lower my interest rate?  I called them when I had a high balance, and they said no.  I lowered my balance and used the card less, and they said no.  I transferred my balance, paid it off elsewhere, and paid this card off every month for 8 months, and they said no.  What will it take for me to get a lower interest rate?  Is it unreasonable for me to want a lower interest rate from them?  I was just given the impression that people who paid on time could usually get a lower rate by asking.  Any ideas or advice?  Also, does anybody know if they ever lower interest rates automatically?  I've received conflicting answers from company representatives.

[Another Reader]

Why would you care if you now pay this card off every month? 

Every bank uses a slightly different credit model.  Barclays' credit model says that's the price point that best balances their risk and reward for your customer profile.  Don't like their rate?  Find an equally good rewards card with a lower rate.  Substitute that card and don't use theirs.  If Barclays wants your business, they will start sending you enticements to use the card.  They may even lower the rate to get you back.  If they don't, well, you have moved on.

If you want to borrow money, credit cards are usually the most expensive way to do it.  Find a card or two with rewards that are attractive to you, and pay them off every month.

[jlcx]

Thanks for the response, Another Reader!  I guess I shouldn't care anymore; maybe I just have residual frustration from when it was actually costing me money.  :P  The idea of this card staying at its current rate for a long time just annoys me somehow, like I feel like there should be progress over time, or some attempt to compete, or that asking for a lower rate should have worked because everybody seems to say it does.  I guess I'll just stop using the card (except a little transaction every month to keep it active) and see if they ever try to entice me to use it more.

[Will]

I also was wondering why you cared what the interest rate is on a card you are paying in full?  But you've answered that. 

One thing I would say to NOT do is: even if you don't use it, don't close that account!  Length of credit history is important too.  It would also affect your credit utilization rate.  Both play a big part in your credit score.

Going to your original question:  I got my rate lowered by using Facebook.  I called Discover twice and was told twice that there was "nothing they could do."  I went onto their FB wall and posted about how disappointed I was, plus a few other tidbits.  Next thing I know, someone from Discover is calling me and not only did they lower my interest rate, they actually REFUNDED back some of the interest from the previous few months (almost $200 worth!). 

[Another Reader]

Every bank is different.  I don't recall Barclays as an especially popular provider of rewards credit cards.

If you want to understand how banks look at borrowers, look back through some of the posts on the FICO blog that's written for the industry. 

http://bankinganalyticsblog.fico.com/

A lot of it is technical and not very relevant, but the articles on decision analytics and on customers reveal a lot about how banks look at you.

[jlcx]

Will: OK.  So try to stop caring about the interest rate, leave the account open, and annoy Barclaycard on Facebook?  I could do that.  :P

[Jamesqf]

Why should they?  Put yourself in their shoes: you're paying high interest on a large balance, which means money in their pocket :-)

[grantmeaname]

There's no balance on it now, Jamesqf, which is the part that seemed nonsensical to the OP.

[smedleyb]

Will: OK.  So try to stop caring about the interest rate, leave the account open, and annoy Barclaycard on Facebook?  I could do that.  :P

Even better:  sign up for the Barclays US Air card:

http://www.mostmiles.com/Chairmans

Take a nice trip to visit a friend or family member on their expense; call and cancel card 10 months later before yearly fee kicks in. 

(ps: I had an issue with Chase several years ago, and they ended up treating me like shit.  I've tapped them for over 15K in travel rewards since, and they've never made a dime off me as I always pay my CCs on time and carry no balances)

[Jamesqf]

There's no balance on it now, Jamesqf, which is the part that seemed nonsensical to the OP.

But unless I misunderstood the OP, there was a sizeable balance when he tried to get the reduction.  Also, there's the history of having had the balance, so they're probably hoping that the current zero balance is an aberration :-)

(I sometimes wonder why my credit card company even keeps me: in the ~20 years I've had the card, and been collecting rewards, the only time I paid any interest at all was in the days before on-line payments, when I was stuck in Britain during a postal strike.)

[grantmeaname]

He's repeatedly tried to get a reduction, going so far as to get a balance transfer when he was refused. That's why they can't expect anything from sticking to their guns, and why it seems odd that he can't get it reduced. Maybe you're right, they could have some reason to think it's better to keep him around in the hopes that he runs up a balance again.

[strider3700]

(I sometimes wonder why my credit card company even keeps me: in the ~20 years I've had the card, and been collecting rewards, the only time I paid any interest at all was in the days before on-line payments, when I was stuck in Britain during a postal strike.)

I'm curious if anyone has ever actually been cancelled for this reason?  Right now I get a few hundred dollars each year from my card and they never make a penny in interest off of me. They should be coming out ahead charging the store their 3 or 4% on the transaction and then giving me 1-2% and any interest off of me is pure gravy  but who knows what their overhead is on each transaction.

[tooqk4u22]

Yes they are still making money off you and your purchases and your history shows that it is low risk so that allocate less of a capital charge to it.  Plus credit card portfolios get syndicated where it is all about statistical analysis.