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My Mom and I Have the Same Credit Card But Her Interest Rate Is Lower – What’s Up?

April 9, 2014
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If you’re shopping for a new credit card, you might choose to get the same one as your mom or dad. After all, if it’s working for them, it’ll probably work for you.

But you may find that the interest rate on your mom’s card is lower than yours – even if you have the exact same card. There are a few possible explanations.

It’s probably her credit

The most likely reason: Your mom has better credit than you do. Your credit score is one of the primary factors that card issuers consider when determining the interest rate you’ll pay on your plastic (or any other type of loan). Two people with the same card can be charged vastly different rates because of score disparities.

But maybe you’re already doing the two most important things to build and maintain a good credit score. You’re paying your bills on time and steering clear of debt. It turns out your mom has another factor working in her favor that you won’t be able to obtain overnight: a long credit history.

Length of credit history makes up 15% of your credit score. If your mom has been a responsible user of credit for decades, an issuer will take this into account when deciding her APR. So even if you’re doing everything right, you may have to do it for a while longer to qualify for the best interest rates.

But it might be a promotion

Your mom’s stellar credit probably landed her a lower APR, but there are other possibilities. For instance, she may have signed up for the card during a low-interest promotion that you either missed or didn’t qualify for.

Credit card issuers sometimes offer introductory “teaser” interest rates to attract new business. These campaigns, which usually go on for a limited time, are aimed at customers with good credit. Your mom may have been lucky and opened her account while the promotion was running — or maybe the credit card company targeted her with an introductory offer because of her excellent track record.

Or it could be her negotiating skills

When it comes to a credit card’s interest rate, you might think an issuer’s decision is final. In fact, your mom may have used her killer negotiation skills to drive her APR down.

It’s a well-kept secret in the credit card industry, but interest rates are negotiable. If you’re a good customer that an issuer wouldn’t want to lose, you’ll likely be successful if you call up your card company and ask for a lower rate. It’s not a guarantee, but most banks would prefer to knock a few points off of your APR than lose a responsible cardholder to the competition. Why not give it a whirl?

In the end, APR shouldn’t matter

No matter how your APR stacks up to your mom’s, it shouldn’t matter. You should make it a priority to pay your credit card bill in full every month. If you do, interest rate isn’t a concern because you’ll never have to pay it.

To keep APR worries at bay, follow these tips:

  • Create and stick to a budget – this will keep you from overspending
  • Track your credit card transactions online to be sure you’re not charging more than you can pay off in a month
  • Be mindful of your credit card’s due date – this way, you won’t forget to pay and get hit with interest charges (plus a nasty late fee)

The bottom line: Just because you and your mom have the same credit card doesn’t mean that you’ll qualify for the same interest rate. This might feel unfair, but if you pay your balance in full every month you won’t have to worry about your interest rate at all!

Mom’s credit card image via Shutterstock