CreditShack.org

Competition between credit card companies is fierce. They all want your business. Especially the companies whose credit cards you already use. Finding new customers costs money, so credit card companies do everything they can to keep their existing clients happy – and charging regularly.

Don’t like the interest rate you’re paying on your credit card? Do something (peaceful) about it! Take advantage of your excellent negotiation position by calling your credit card company and asking for a better rate. In most, but not all, cases, they’ll lower your interest rate if you ask nicely and have been a good customer (i.e. no recent late payments). Either that, or they’ll send you a toaster.

Reducing your interest rate by only a few percent could save you thousands of dollars depending on how much you owe. If you have good credit, you’re probably inundated with offers for zero-percent balance transfer cards. Read the fine print and give serious consideration to transferring your high-interest credit card balances to the zero-interest card. However, transferring balances can be a hassle, and there’s no guarantee that you’ll qualify for the transfer. Asking your current credit card company to lower your interest rate may work just as well. A few minutes of your time could net you thousands in savings.

What can you do to increase your odds of successfully negotiating a lower interest rate?

1. Always remember that you have the upper hand. Your credit card company is not doing a service to you by offering you a lower rate. Instead, you are benefiting them by offering to remain as one their customers.
2. Have a low-rate balance transfer offer handy when you call. When customer service asks how they can be of assistance, explain to them that you have been a loyal customers for X years and that you would like to remain their customer. Tell them you received an offer for Y% interest rate from another bank and that you will transfer your balance unless they can lower your rate. Ask them to match the rate of the competing offer.
   Although they probably will not match the rate exactly, that’s okay. A slightly higher rate on purchases for your current card may be more useful to you than a lower rate on a balance transfer, since you can’t use the balance transfer card for purchases without incurring large finance charges.
3. The “front line” customer service reps may not be authorized to modify your rate. If they cannot change your rate, ask to speak to their supervisor. The supervisor may be more willing to accommodate your request.
4. Be polite. Customer service reps are human, just like you. If you’re nice, they’ll be nice, and will be more inclined to give you what you ask. Whatever you do, don’t threaten to sick your Rottweiler on the rep if he doesn’t lower your rate.

Here is a sample phone conversation: (you results may vary)

C.S. Rep: Thank you for calling Second National Bank. My name is Amy. How may I help you?

You: Hi, Amy. I’ve had my Quadruple Platinum Card for twenty-two years. I’ve always paid on time and have never exceeded my credit limit.

C.S. Rep: You’re certainly right. My computer shows you’ve been a cardholder since 1983 and have a perfect payment record.

You: I’m currently paying 14.9% interest on my purchase. Lately, I’ve been receiving great credit card offers from other companies. I’m holding here in my hand an offer for a 4.9% interest rate Cesium Card from Atlantis Bank. I’d love to remain your customer, but this Cesium Card offer is to good for me to pass up. Can you match that 4.9% interest rate?

C.S. Rep: Let me see what I can do. Can you hold for a moment? … Thank you for waiting. I can lower your interest rate to 5.9%. Would you like me to do that?

You: 5.9% sounds good. It’s not 4.9%, but it saves me the hassle of transferring my balance. And, I’m embarrassed to admit this, but I like to look at my reflection in my Quadruple Platinum Card.

C.S. Rep: You made the right choice. Just so you know, that Cesium Card you were interested has been known to melt in customers’ hands and catch fire spontaneously. Besides, the Atlantis Bank headquarters has been at the bottom of the ocean floor since before even Plato.

You: Sounds like you know your periodic table of the elements! Thank you for your help and your willingness to participate in a sample conversation.

C.S. Rep: No problem. Thank you for not offering to sick your Rottweiler on me. Have a nice day! Goodbye.

If you don’t succeed in negotiating a lower rate, you can do one of three things: You can close the account and take advantage of a balance transfer promotional offer. You can call again to request a lower rate in a month or two. Lastly, you can do nothing and continue on with your current rate.