Asking your credit card company for a better rate decreases how much you pay in finance charges each month; and if you're looking to pay off your credit card balance, a lower rate can speed the process. Unfortunately, getting a better interest rate is much easier to say than do. You can ask your credit card company to reduce your rate, but they don't have to comply with your request. For that matter, you'll need to sharpen your negotiating skills. Here are seven tips for asking your credit card company for a better rate.
1. Compare Your Current Rate with Your Other Credit Cards
Before asking your credit card company for a better rate, check the interest rate that you’re currently paying on your other credit card accounts. If your other credit card companies charge much less, chances are that you meet the requirements for a reduced interest rate.
2. Research Other Credit Card Options
If you credit card company refuses to lower your interest rate, consider transferring your balance to a low-rate card. Therefore, do your homework and research other credit cards available to you. If you can find another card that offers a better rate than your existing card, use this as your bargaining chip.
3. Maintain a Good Payment Record
The truth is, a credit card company will not reduce your interest rate if you pay your bills late. The company may quickly run your credit to see if you meet the qualifications for a lower rate. Even if you pay this particular credit card company on time, the fact that you pay other creditors late can have a negative impact on your ability to snag a better rate.
4. Mention Your Long History with the Company
When speaking with a representative on the phone, you might need to sell yourself. Not only should you mention your timely payment history, if applicable, you should also mention your long history with the company. The fact that you're a loyal customer who always pays her bills on time might justify a better rate.
5. State Your Plans to Transfer Your Balance
If you’ve been a loyal customer, chances are that the credit card company will want to retain your business. While speaking with the representative, state any plans to transfer your balance to another card if the company is unable to lower your rate. However, only say this if you’re going to follow through.
6. Ask for a Temporary Rate Reduction
If the credit card company can't lower your interest rate, suggest a temporary rate reduction. I tried this approach six years ago and it worked. My credit card company reduced my interest rate by five percentage points for six months.
7. Ask to Speak with a Supervisor
Some customer service reps aren't authorized to reduce interest rates. However, if you ask to speak with a supervisor, you might make some headway. Restate your wishes to acquire a better interest rate and explain to the supervisor that you've been a loyal customer. Of course, there are no guarantees. If the supervisor cannot help you at this time, hang up, and then call again in a few months.
Unfortunately, some people pay little attention to their credit card interest rate. If you pay off your balance in full each month, you rate might not matter. But if you carry a balance from month-to-month, you could pay a ton in finance charges, therefore, it’s important that you acquire the lowest rate possible.
Have you been successful in negotiating a better rate?