Money & Career

How to negotiate a lower interest rate on your credit card

By: Kelley Keehn

© istockphoto.com/Kryu Author: Canadian Living Credits: © istockphoto.com/Kryu

Money & Career

How to negotiate a lower interest rate on your credit card

By: Kelley Keehn

Canadians are polite by nature; we don't want to appear rude or pushy. And we're busy—who has the time to find out what interest rate we pay on our credit cards? With savings to be had, we should definitely take the 20 minutes to make a money-saving call.
Most Canadians—70 percent, in fact—pay off their credit card off each month, but those who don't carry an average balance of $3,500.

With an annual credit-card rate of 18 percent, if you only paid the minimum payment every month (two percent of $3,500 would be $70), it would take you nearly 34 years and close to $9,000 in interest charges to pay off this debt!

Negotiate your interest rate from 18 percent to 11 percent, and the debt would be paid off in just over 17 years with interest paid reduced to $2,584. That's a $6,500 savings for one call.

Credit card script

You:
"Good morning/afternoon. My name is __________. I have my credit card with your company."

Customer Service Agent:
"How can I help you today?"

You:
As you can see, I've been a good customer for a number of years. I've always paid my minimum balance on time and would like to discuss an interest-rate reduction on my credit card. It’s currently at 18 percent—what's the best rate that you can do for me?"

Customer Service Agent:

"Sure. Let's take a look at your account and our low interest–rate credit card options."

You:
"Actually, I'd like a rate reduction on my current card—not a new card or a new product. Can you make that happen today?"

The worst that can happen is that you'll get a no in response to your request. But you don't have to accept that to accept that answer. Ask (gently) for a supervisor before you disconnect and redial to try your pitch again.

General tips to consider:
• Be polite; there's no need for movie-style haggling.
• Be honest; don't make up deals from competitors, but do cite real offers that you're aware of or think you deserve.
Call during business hours: Monday to Friday between 9 a.m. and 5.p.m. This is when most senior staff members, the ones who can approve requests, are generally working.
• Remember, a deal is only a deal if the bargain is something you wanted at the start of the journey. Don't get caught up in freebies that don't benefit you in lieu of a rate reduction.

Credit cards are important, especially when it comes to your financial report card. Check out why it is important to know your credit score.

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How to negotiate a lower interest rate on your credit card

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