Cutting Costs: Negotiate Better Terms with Your Credit Card Company

 With good credit, you are in the position to negotiate better terms with your credit card company. Joel Greenburg, president of Garden State Consumer Credit Counseling, says, “The climate today is very good for negotiating a lower rate. Banks are very, very hungry for new business today and even hungrier to retain existing customers.”

Terms you can negotiate include lower interest rates, a higher credit limit, no annual fee, waived late fees, better loyalty programs, and a different balance due date.

To negotiate lower interest rates, find out what other credit cards are offering. Credit card companies have a variety of programs that they are willing to offer if they think they are going to lose business. Call your credit card company, and let them know you are thinking of switching companies, unless they can match the other card. Many companies can even give you an introductory rate for a period of time. Even if you can’t get the exact rate you want, you may be able to lower your rate enough to save money over transferring to another card.

A higher credit limit may increase your credit score, because credit scores rely heavily on your available balance ratio. You can avoid hassles by asking for small increases. “The company should be able to approve small increases right away, but for higher amounts, you’ll probably have to talk with the people who specifically handle credit line increases,” says Scott Bilker, the founder of DebtSmart.com.

Remove the annual fee. Unless you are using an airline card or a high-end American Express, there is no reason anyone with good credit should be paying an annual fee. These fees add up and do not benefit you, so call and ask for them to be removed. Many card companies advertise ‘no annual fee,’ so have a list of recent offers to reference when you call.

No matter how careful you are, bills still get paid late. Use your good credit and payment record to get late fees waived. As long as you do not make it a habit of paying late, credit card companies will drop an occasional late payment fee.

Every time you use your credit card, the company collects a fee of 2-3% per transaction. "If you're a responsible credit user, a 1% return on your overall charges is the very least you should get," says Todd Mark, vice president of education at Consumer Credit Counseling Service of Greater Dallas. Look over the different packages your credit card company offers, and request the one that would best suit you. You may even be able to keep the same card and account history after the change.

If the due date for your credit card does not work well with your schedule, request one that works better. You do not need top credit to ask for this change, and may even be able to select the date you want through your online account.

If you do not have good credit, begin improving it today, by paying all of your bills on time. It takes about six months of steady payments to begin increasing your score. You will find the rewards are well worth the effort.

(c) Copyright text and photo Christa Dovel 2010