Negotiate a Better Credit Card Rate

/ BY / Credit 101

Ever received a credit card offer with a low rate and wished that your current credit card company would give you the same deal?

Maybe they will-but you'll have to ask.

A 2010 online survey conducted by Harris Interactive found that 65 percent of credit card users have never tried to negotiate their credit card rate, although 93 percent know it's possible to do so.

There are some good reasons to make the effort. If you're carrying a balance on your credit card, getting a break of even a few points on your interest rate could put more money in your pocket each month or help you pay down your balance faster.

Here are some tips to get you started.

Gather information

You need to be prepared with the facts before you call your credit card company to ask for a better rate. Start by reviewing your history with the company. Have you gone for a few years without missing a payment, and do you always make at least the minimum payment? Be ready to point that out that you're a good customer.

Figure out how much you charge, on average, each month. Remember, your credit card company issuer is getting a chunk of that amount in fees, so it's in their best interest to keep you as a customer, especially if you charge a substantial amount.

Take a good look at your current credit report. You're entitled to one free copy of your credit report each year from each of the three major credit reporting agencies, Experian, Equifax and TransUnion. You can apply for the free credit reports at AnnualCreditReport.com.

It also helps to know your credit (FICO) score, but you'll usually have to pay for that information. FICO scores can range anywhere from a low of 300 to a high of 850. If your score is 750 or up, you should be eligible to get the best rates available on your credit card.

Make the call

Before you make the call to your credit card customer service department, jot down some notes with all the points you want to make. ("I've been a long time customer, I always pay my bills on time," etc.) Then tell them about the credit card offers you've been getting and ask if they can adjust your rate downwards.

You may get a customer service representative who tells you that he/she can't change the rate on your card. Ask to speak to a supervisor, and keep asking to talk to someone else until you get someone who has the authority to respond to your request.

The card company may try to offer you a special rate for just a few months (something that matches an introductory rate, for example). If you know that you can get a better longer term rate from another company, tell them so and insist (politely) that's what you want.

Remain friendly and polite in all your conversations with the credit card company representatives. It's a good idea to keep track of the names and contact numbers of the people you've talked to, in case you have any questions or concerns about your rate at a later date.

Plan for alternatives

So what if your credit card company doesn't want to give you a break on your rate, despite all the evidence that you've compiled showing that you deserve one? It may be time for you to start shopping around for a new card. Fortunately, the Internet makes it easy to do.

Take a look at the creditcardxpo.com website, for example, and you'll find offers from all the major carriers (American Express, Visa, MasterCard, Discover) with offers specifically targeted for people who want low interest cards. (You can also find cards that offer rewards, airline miles, balance transfer and instant approvals as well.)

Don't assume that the interest you're paying on your current credit card is the best that you can do. If your credit record is good, you should at least try to see if you can do better, either with your current card issuer or with a new one.

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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. CreditCardXpo.com recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.