How to Negotiate with Credit Card Companies

Negotiating For a Better Interest Rate on Your Credit Card

Many of us have learned valuable lessons in the recent economic slump about why over-extending ourselves in credit card debt is a bad idea. The lessons we’ve learned will serve us well in the future, but what about the present day?

If you, like many others, have been a victim of the economy, have lost a job or had your hours cut, then you may need some immediate relief. In many cases, the credit card companies are willing to offer you that. The problem is that you have to ask, they aren’t going to call you and offer you a lower rate.

Taking a proactive approach to alleviating part of your credt card debt is the only way it’s going to be accomplished. In many cases you can minimize your credit card debt, lower your interest rates, or even remove part of the debt, but you will need to make contact with the credit card companies in question and start the bargaining process. To negotiate a better rate is going to take effort on your part.

Depending on the amount of credit card debt that you have, as well as the shape that your credit is in, you’re probably getting some type of credit card offers from other companies. Many of them will offer much lower rates of interest than those you may be currently paying. In many cases, you can negotiate with current companies to get close to the rate that the new company is offering.

Organizing the Bargaining Process

Gather those credit card offers that you have an interest in. This gives you a bargaining chip with which to continue, and a starting point. Organize all of your offers, as well as your debts. Get a list of what you are paying each month, to whom you are paying it, as well as the interest rates for each card. Figure out how much you would save each month by transferring all of your balances, or even just one or two to this card.

Be sure that you have a good accounting of how long the introductory or special interest rate will last and what it can save you in the long term.

Make The Calls

Call your credit card companies in order of highest interest rate to lowest. When you call them, speaking to a customer service representative probably won’t have the authority to give you a break on your interest rate.  Ask if you can speak with a supervisor, who has the power to give you the lowered rate that you’re looking for. In many cases the first representative that you speak with will attempt to dissuade you from speaking with a supervisor, but stand your ground. The have to allow you to speak with their manager.

Speak With Supervisor or Manager

Speak clearly and outline your case succinctly when you get a supervisor on the phone. Tell them firmly that while you have had good service from their company in the past, that you feel that the interest rate is way too high and you would like it lowered.

Tell them in no uncertain terms, that while you do appreciate their past service, you are currently in a situation where you find it necessary to cut your budget and that if they can offer you a lowered rate of interest, you will stay with them as a customer, but if they can’t, you will close your account, transfer your balance, and take your business to another company.

A small tip on this one. Be sure that the credit card you name as the other company, if you name one, is not a subsidiary of their credit company. I found myself in this embarrassing situation at one point and lost a good bit of ground on the negotiating process.

Be firm in what you want, and don’t be afraid to ask to speak to the supervisor’s supervisor if you need to. If you don’t get the offer that you’d like to have then thank them politely and wish them a good day. Then take the offers and transfer your balances to the other companies.

Closing Your Account Tends to Get You New Offers

Oddly enough, once you have transferred your balance out, or have set it in motion, you may receive some outstanding offers in order to gain you as a customer again. While you may not want to consider the offers since your balance with them is effectively zero, you may want to bear in mind that it sometimes happens.

In order to negotiate your credit card interest rates most effectively, stay firm, stay focused and have, as the saying goes, all your ducks in a row. Know what you owe, where you owe it, and who is willing to give you the best rate. Make your calls all in the same day and don’t stop until you’ve gotten a lower rate on at least some of them. There is a way to lower your credit card debt, but it will take perseverance and effort on your part.

Here is a template for a written request to lower your interest rate.