Defer credit card; reduce rate

A reader of mine reached out last week (we’ll call him Bob from Burnaby) stating he was one of the lucky ones in this COVID-19 crisis. He still has his job and doesn’t think he’ll need to defer his mortgage, loans or credit cards. But he was wondering if there’s any legitimate breaks he could tap into with his bank?

He has a $4,000 balance on his credit card and heard about the banks slashing their interest rates. He was curious to see if he could take advantage of that, even though he can still make his monthly minimum payments (and a bit more)?

He got online as he’s heard the horror stories about waiting for endless hours on the phone. It was last Monday. The app told him the first available call back was Saturday at 4pm. Since he wasn’t in a panic, that was just fine.

Sure enough, he wrote me today to tell me that his bank called him at exactly 4pm. On a Saturday, and an Easter weekend no less (bravo RBC Royal bank!).

Here’s an edited summary of his conversation with the RBC phone representative:

  • Bob wanted to know if he could reduce the interest rate on his platinum card.
  • He thought he was paying 19.99% interest but because he was late a few days on one payment back in July, his interest rate was bumped up to 24.99% interest and will remain there until he makes 12 months of payments without one being late.
  • He told the rep he didn’t need to defer his payments – just that he wanted a lower rate.
  • After a minute on hold, the rep told him there were lower rate credit cards, but that was a bit of a process. They’d have to approve him for the new card and all that would take time.
  • However, if he would like to make a deferral arrangement on his credit card now, RBC will refund him 50% of the interest paid, each month, on his statement date.
  • The rep gave him an instant 3 month deferral, so if Bob continues to carry a balance, whatever interest he pays, he’ll get 50% refunded back each month for 3 months.
  • The rep also wished him very well and told him if he was still having financial difficulties after the 3 month deferral, he could extend the agreement by one month online, or, for another three months by giving them a call.
  • The rep told him interest would accrue on the deferrals, so he essentially would be paying interest upon interest.
  • However, that he could still make minimum payments or payments of any amount on his account, any time.
  • In essence, he didn't need to defer his payments to get the better rate.  He just had to make a deferral agreement.

So, the morale of the true story is: if you’re carrying a balance on your credit card, call up your bank for a deferral agreement. Don’t actually defer your payments if you don't have to. In fact, keep making them and even more if you can. However, you’ll get the interest rate reduction.

Please note that this is a RBC specific true example. Other banks are reducing rates but not providing refunds.  Check the specifics and details from your own bank.

Have a story to share? Or a question to ask? I’d love to hear from you. Please email me at:

Stay safe!