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Negotiating Lower Credit Card Rates

Negotiating Lower Credit Card Rates

The art of negotiation isn't just for flea markets and swap meets or haggling over the price of a new car. Depending on your credit history, it may be possible to negotiate lower credit card rates and start saving money today. Just like asking somebody on a date, it doesn't hurt to ask and you just might get a yes. Whether or not you're able to successfully negotiate a lower interest rate will depend on a number of factors and how you approach the situation. We'll cover a few of the best negotiation tactics to use when trying to get a lower interest rate for your credit card.

First and foremost, you have to know where you stand you credit card company and the best way to find out is to get your free annual credit report from one of the three credit reporting agencies. Once you have your credit report you can review your payment history and outstanding balance with the credit card company in question. Credit card companies are more likely and more willing to work with those consumers which they feel are valuable assets and are important to their bottom line. To that end, if you have any missed or late payments make a concerted effort to correct this situation and be a good credit card user going forward. This will give you a stronger position when negotiating for a lower interest rate on a credit card.

Once you have your credit situation in the best position possible call customer service by using the 800 number on the back of the credit card and ask if there's any way to get better interest rate. After you ask for a reduced interest rate they will almost certainly review your payment and credit history to determine whether or not a lower rate is warranted. If you're unable to get a lower rate initially you may have to speak with a supervisor. If the supervisor is unwilling to reduce your interest rate then threaten to cancel your credit card at which point they should transfer you to the retention department. Keep in mind, threatening to cancel your credit card will only work if you're the type of consumer which DOES NOT pay off your credit card balance in full each month. This is important to understand because some credit card users actually cost companies money when they pay their bill off in full every month. These accounts cost money to maintain and if the balance is paid in full they are unable to collect any interest and therefore make money. If however you keep a relatively high balance and pay hundreds of dollars in interest it is in their best interest to lower your interest rate to keep you happy and prevent you from moving your balance to another credit card.

At the end of the day it is actually quite easy when negotiating lower credit card interest rates. There is no magic formula or secret code and the only thing that is required is to ask nicely and explain why you think you deserve a lower interest rate. If at the end of the day you are still unable to obtain a lower rate for your credit card there are always other companies out there who would be happy to have you as a customer. These companies will often transfer your balance with no balance transfer fee and 0% interest for up to 18 months. As a consumer you have the power to determine what interest rate you pay on your credit card balances. Just keep in mind that if you don't carry a balance from month to month and make payments on time, it will play a significant part in whether or not you will successfully be able to negotiate a lower interest rate for your credit card. Don't be afraid to ask for what you want and don't be afraid to move on if you don't get it.

Image by: Ed Ivanushkin