It’s not that your credit card company deliberately wants to keep you in the dark. Hmmm…okay, maybe some do! But most major banks are pretty good about disclosing terms and conditions on credit cards. The tips I’m talking about here fall into the “I didn’t know that!” category—that you can, indeed, negotiate with your credit card company.
If you’ve had problems making payments on time or have had other issues being a responsible cardholder, though, you might not want to initiate contact with your card issuer because it can backfire (see #7). So that’s my “don’t try this at home” warning for those whose records can’t pass scrutiny.
#1: You’re the boss
The card issuers work for you, not the other way around. You have more power than you know. Really, you do. And the higher your credit score, the more power you have.
How high does it have to be? At least 700 to wield a moderate amount of power. Over 750, and you’re in a sweet bargaining position. It’s easy to fall into a trap of complaining about how you’re being treated. But if you don’t like something, take action. This might mean “firing” your credit card issuer or just having a serious talk with someone about your concerns.
But even if your credit score suffered in wake of the Great Recession, you’re still in command. You don’t have as much negotiating power as those with excellent credit do, for sure. But you’re still in charge of your credit life and you’re the one who will choose how to get your credit back on track.
[Credit Score Tool: Get your free credit score and report card from Credit.com]
#2: You can lower your current interest rate
You know what tactic works well here? Flirting with the competition. Let’s say you get an offer in the mail for a good-looking credit card that has a lower interest rate than the card you currently have. Call your current issuer and be your nicest, most cordial self. Tell the customer service rep that you’re considering getting this new credit card so you can have a lower interest rate.
If there are any other features the new card offers, such as no baggage fees, then mention those, too. Say that you’d really prefer to stay put since you’ve been such a loyal customer for so long. If you’ve been a stand-up customer, you have a chance of making this work.
If you don’t get anywhere with the service rep, ask to speak with a supervisor. And through all of it, be polite and don’t get frustrated. Even if you don’t succeed on the first try, make a note of the supervisor’s name. Be the best-ever cardholder for six months and then try again.
[Related Article: Credit Q&A—Does Interest Rate Affect Your Credit Score?]
#3: You can play hard to get before you apply for a new card
You’ll need a little bit of confidence to pull this off. It also helps if you’ve had acting lessons because no matter how much you want the card, you act indifferent. Your attitude is: What will you offer me to get my business?
The card issuer needs you more than you need them, and that’s why this tactic can work. Again, having competitive offers in hand helps give you the necessary clout. You explain that you’d like to become a cardholder, but you’re looking at an offer from a competitor and this other card doesn’t have an annual fee. Or maybe the other card has a lower interest rate. Ask your would-be issuer if they can waive the annual fee or beat the competitor’s interest rate.
[Credit Cards: Research and compare credit cards at Credit.com]
#4: You don’t actually get 45 days’ notice when your bank decides to raise your interest rate
According to the CARD Act, the issuer does have to give you 45 days’ notice when your interest rate is being increased. That just means that you have 45 days before you have to pay the higher rate. You actually start accruing interest at the higher rate on any purchases you make 14 days after the notice was mailed. So on the 15th day after the notice is mailed, you start paying a higher interest rate on new purchases.
Legally, credit card issuers aren’t doing anything wrong. But don’t you suspect a few of them are counting on consumers to be unaware of this loophole in the CARD Act? As soon as you get the notice in the mail, look at the postmark date so you know when the new rate takes affect.
Image: maximolly, via Flickr.com