Many people take high interest rates and extra charges lying down. But if you have a good credit history you can negotiate better rates and lower fees just by picking up your phone. Credit card companies don’t tell you this, but it’s true.
There is a rule in marketing that attracting a new customer costs 10 times as much as keeping an existing customer. Because competition is so fierce in the credit card industry, you’re an attractive asset to their business and it makes sense and cents to keep you in the fold.
Here are some examples of what you can get with a simple, polite phone call to your credit card company:
- Late payment fee? If it’s your first “offense,” a simple call to your credit card company will likely win you a reversal of the charge.
- High interest rate? Simply call and request a switch to get your interest rate lowered – but if they offer you a lower rate with an annual fee, refuse to accept the annual fee, providing an example of a competitor’s offer without an annual fee. To keep your business, your creditor will likely waive your fee and give you a lower rate.
- Low credit limit? An easy way to boost your credit score is to request an increase in your spending limit, which will automatically lower your debt-to-credit ratio. The debt-to-credit ratio is how much credit you are using out of your available credit and is a factor in your attractiveness to other credit lenders. Just make sure you don’t use the increase as a license to spend more!
- Did your credit card company jack your interest rate without much notice? Credit card lenders are only required to give you 2 weeks’ notice when they increase your interest rate. If you have a solid track record and can easily get a competitor’s lower rate, call up your credit card to negotiate a lower rate.
Tips for dealing with banks over the phone:
- Call as soon as possible after your bill arrives if you’re disputing a fee
- Have your statement on hand when you call with numbers and figures, and older statements that show your good history as a customer
- Be prepared with “deal breakers” – you’ve had other offers, you’ll transfer or close your accounts
- Be calm and polite, don’t be a jerk about it
- Don’t blame the representative for mistakes
- Don’t close your account right away before giving your bank a chance to resolve your issue
About the guest author:
Linda Bustos is a contributor to Creditor Web, where you can learn more about credit cards, banks and how to use plastic money wisely.
Copyright Enough Wealth 2007