For years, every time I’d open that pesky envelope that came once a month, complete with a total due and minimum payment due, it was always the APR that I saw. It was frustrating for a few reasons. First, my credit was strong – I knew that much, but more importantly, I felt powerless. Worse, I had no idea what closing that account and choosing another lower APR credit card would mean for my credit scores. These days, though, consumers are much more empowered. We know we have options and there’s no shortage of valuable information, tips and facts on consumer credit, either, courtesy of the internet. Years later, I still have that same credit card I’ve had for a dozen years – and though I hate to admit it, it’s only been three years ago that I actually gained my confidence to contact the company. Turns out, I probably could have saved a lot of money had I made that call much sooner. So, with that in mind, our editors have come up with three of the best ways to negotiate better credit card terms – including a lower interest rate or securing a higher credit limit – and yes, it can be done.
Remember, and we’ve all heard it before, confidence is key. The better prepared you are, the better your odds of getting what you want. And along with that preparation, you don’t want to waste your time – so be sure you get to the right person the first time. One consumer we heard from recently retells her story of speaking to no less than five people within a two hour phone call – yes, two hours. That’s amazing – it’s two hours out of her life, much of it spent probably on hold and most certainly telling and retelling her reasons for calling. It doesn’t have to be that way. Be sure the person you’re talking to is in a position to help you get what you’re looking for. When the customer service rep comes on the line, quickly say,
I would like to speak with someone who can help me lower my interest rate. Can you do that?
Sometimes the first person you speak to can, more times than not, though, it’s going to require a manager. Your goal is to discern quickly whether or not this is the right person and if not, to respectfully ask to speak with someone who can make that happen. And really, you can say just that: “I don’t want to waste your time and I really appreciate your help, but would you mind putting me through to someone who has that authority?” The key isn’t to make the customer service rep feel bad, but you also don’t want to worry about bruised egos. Get straight to the point.
Don’t make your call until you’ve did a bit of due diligence. Pull your credit report – have it in black and white right in front of you that years of on time payments and proof of paying more than the minimum due. It adds creditability and lets the card company know your bases are covered and you mean business. You can be sure they’re looking at your history, too. Be sure you know exactly what they’re looking at. Consider it your efforts of leveling the playing field. Look at your report the way a creditor might. That’s one good way of gaining a new perspective on credit, too. It’s just another tool in your arsenal.
It’s a negotiation. You wouldn’t go into a job interview with no intentions of sticking to your demands and unwilling to compromise. Imagine being offered a job that pays $58,000 a year, but you refusing to budge unless you secure a $60,000 salary. You wouldn’t dream of turning it down, right? Besides, part of negotiation is the ability to compromise. You may not get that $60k salary, but you might be able to negotiate other perks that have real value for you. It’s the same thing with your credit card. If you can’t get the point drop you want, but it’s close, negotiate for at least a temporary drop for, say, 12 months. It’s all about compromise. Remember, the card company isn’t obligated to drop your rates – so don’t allow an unbending approach prevent you from getting something out of it.
Even if your credit card company, after your best efforts, refuses to budge, there exists the possibility of ending the relationship you have with it. You can be sure that’s not at all what your card company wants; odds are, if it can, it will try to ensure you’re a happy customer. If, though, you aren’t satisfied, you might want to consider a balance transfer card with an intro 0% APR for balance transfers. That will give you a window of time to pay down the debt in its entirety with no interest at all. Be sure to check out the offer in its entirety, though. An intro rate for balance transfers is fine, but if after it expires, the APR is higher than what you’re paying now, you’ve defeated your purpose. Don’t be your own worst enemy in your efforts.
Perks and Benefits
Also, another reason you might consider a new credit card is the many perks and benefits that they come with. Your current card company might even offer one of its newer credit cards with the balance of your old card transferred over. It might come with rewards points, cash back options and the absence of a yearly fee. That might even be better than negotiating your current credit card’s terms. The point is to not underestimate any of the many dynamics in today’s credit cards.
Finally, consider bringing in your pre-teen or teenager to the mix. Allow them to witness your efforts of pulling your credit report, weighing your options and even speaking to the card company. It’s the only way our kids will know that once they hit adulthood, they too will have the same choices you have, courtesy of a strong credit history. Had my parents done that, I might have saved far more in interest over those years I was too timid to make a change.
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