There are billions of dollars in fees and interest charges generated each year for credit card companies but those same fees are costing you hundreds of dollars or more as the owner of a credit card. As the competition becomes even more fierce among credit card companies, there is more incentive for your credit card company to keep you as a customer. Because of this reality, you as the card holder may have a bit of power over how much interest and fees you shell out each month to the credit card company.
Many consumers do not realize they have some power to be able to renegotiate the interest rate of their credit cards so they continue to pay as they are told. But for anyone who is working on a stricter budget and looking to cut costs, you should get in touch with your credit card company now and see how far they are willing to go. Before you get on the line, there are some things you should know that can help you succeed with your interest rate renegotiation. Here are some tips for getting a lower interest rate:
Check Your Payment History First
If you have been a late payer or have missed credit card payments in the past, you will not have the pull to renegotiate much. Make sure you have paid on time consistently as credit card company will be more flexible with a good, solid customer.
You Want the Lowest Fixed Rate
Introductory rates can be very attractive but they are not realistic for the long term. When you are asking for a better interest rate, be sure to ask for the lowest fixed rate. Introductory rates will only last for so long. It's the rate that you have afterwards that is the most important.
Generate An Offer
Check into the prime rate around the country. Your credit card company may not be willing to go that low but if you can talk them in to around 10%, you'll still be better off than if your rate was 20% or higher.
Do not Attack
When you are negotiating for anything you need to remain logical and cool-headed. Threatening company representatives will get you no where fast. You need to simply explain that you have has a better offer from another credit card company than ask what they can do to remain competitive.
Do not Threaten
Many people will threaten bankruptcy to plead their financial hardship situation. But this is not the right approach because it only presents you as being a financial risk. Unless you are really danger of bankruptcy, do not threaten any negative actions just to get a lower interest rate.
Do not Blow Smoke
If you do not get anywhere with a negotiation but still have no concrete plans to go anywhere, do not say that you do. If you are ready to move on to another company and have shopped for a better deal, then feel free to mention you'll be taking your business elsewhere. If you do plan to close out the account, be sure you are able to pay off the balance in full and are prepared to never use the card again.
You can successfully renegotiate many credit card interests rates these days but it is up to you to do it with the proper etiquette and preparation. The savings you can get for yourself will be worth the time you spent getting ready for the negotiation.