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Cutting Costs: Negotiate Better Terms with Your Credit Card Company

Updated on January 26, 2010

 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.”

Negotiating

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

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    • Christa Dovel profile imageAUTHOR

      Christa Dovel 

      8 years ago from The Rocky Mountains, North America

      Thanks Habee.

    • habee profile image

      Holle Abee 

      8 years ago from Georgia

      This is great info!

    • Christa Dovel profile imageAUTHOR

      Christa Dovel 

      8 years ago from The Rocky Mountains, North America

      That is interesting. I have never actually called to ask for a lower rate, though I have done many of the other things. I do know that if you really want to stick with the card you have, and get the lower rate, then you often have to speak to someone in authority, not the person who answers the phone.

      What amazes me is how many offers I get from companies I already associate with. If I call for an advertised rate, they say, "Oh, you are already a card member with us. You should not have got that offer!"

    • LiftedUp profile image

      LiftedUp 

      8 years ago from Plains of Colorado

      These are good suggestions, but I had what I thought was a surprising response when I contacted one of my CC companies to ask for a lower interest rate. I told the representative that I held in my hand an offer from a different company for half the rate, and she said, "Go ahead and take it. Make the transfer. We told you what our rate was going to be when we sent you the new information." So I made the transfer from a 13.9% rate to a 7.65% one, and immediately began to receive offers from my former company for lower rates! Too bad, I'm not going back to them, and they lose.

    • Christa Dovel profile imageAUTHOR

      Christa Dovel 

      8 years ago from The Rocky Mountains, North America

      Getting better treatment requires good habits, such as paying on time and staying within your credit limit. Best of luck to you, and thanks for reading.

    • amulets profile image

      amulets 

      8 years ago from Singapore

      Yes. You are right. Guess I better get myself managing the credit card billing. Sometimes I forget to make payment on time and the late payment charges are huge. I should be asking for waiver the next time when I forget.

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