Info about Bargaining
Negotiate a Better Rate
When you’ve taken a gander at the current rates being offered, you can use them as a negotiating tool with your card issuer. Trying to bargain down your rate might sound like an intimidating, complex process, but it’s actually quite simple and can be very empowering as it saves you money.
Believe it or not, many consumers have saved hundreds and even thousands of dollars by simply making a five minute phone call and asking their issuer for a lower rate.
Unless you already have a great rate, it’s definitely worth calling your lender to see if you can get a better deal.
I’ve done this myself many times over the years, so I know that it works. However, your chances of succeeding are significantly diminished if you have a poor credit rating or you haven’t used your card responsibly (for example, you’ve had more than one late payment in the past year or you exceed your credit line on a regular basis).
Here are five tips to increase your chances of getting a lower rate when you talk to a customer service rep:
• Always be courteous and professional.
• Say that you’re keenly aware that there are better offers available to you. Mention specific low-rate offers from other card issuers.
• Point out your good track record and your good credit score.
• Explain that you’d like to continue using the card—and plan on doing so—if your rate is lowered.
• If the answer is “No,” politely ask to speak to a supervisor, and repeat steps 1 through.
Talking to a supervisor is often worth it because the customer service reps are more limited in their ability to make account changes. If the supervisor can’t help, your next step should be to threaten to stop using the card and to transfer your balance elsewhere.
When you call their bluff, you’ll probably be transferred to the account retention department. Its sole purpose is to keep customers (hence the name), so this department can often give significant concessions to make you happy.
Although the lender isn’t totally at your mercy, you have a good chance of achieving positive results if you follow these tips. Just be realistic about your expectations. If your current rate is 21%, for example, don’t expect your issuer to instantly lower you to 6.9%. A It’s fairly common for an issuer to lower a rate by a few percentage points, but some members of the CardRatings.com forum have achieved dramatic results.
Jevon McAlister, a regular poster from Brooklyn, New York, was able to lower the rate on his Chase MasterCard from 21.99% to 11.45%. That’s more than 10% from one phone call. Where can you earn that guaranteed rate of return today?
This was McAlister’s first credit card, and he’d made on-time payments for 21 months before he made the call.
His approach was very straightforward:
I just called and asked the customer service rep, ‘So…what can you do to help me with my rate today?’ Actually, she told me that I can call every three months and should be eligible for a rate decrease. So I called three months later and they lowered my rate yet again to 8.99%!
I hope that McAlister’s two toll-free calls, which together saved him a whopping 13%, inspire you to take the initiative.
Expect a positive outcome, but if your efforts don’t result in even a small rate decrease, I suggest you follow through with the threat you made to the supervisor. Look for an attractive balance transfer offer from another card.
• Fees
Annual fees on low-rate card offers are rare, but a few cards with very low ongoing rates do come with annual price tags. These cards, sometimes referred to as “superprime” cards, typically have rates that are close to or even below the prime rate. As you might expect, they’re targeted price tags. These cards, sometimes referred to as “superprime” cards, typically have rates that are close to or even below the prime rate. As you might expect, they’re targeted to people with excellent credit scores (around 720 or above). If your score is that high and you’re considering a card that falls into this category, compare the cost savings to a card without an annual fee that probably has a slightly higher APR.
Paying a nominal annual fee of $25 to $75 often results in significant interest savings, particularly if you have a balance of a few thousand dollars or more. On the other hand, if you never carry a balance and have a cash reserve to deal with financial emergencies, I see no reason to pay an annual fee of any amount.