How to negotiate a better interest rate.
A few years ago, when I had over $15,000 of credit card debt, I was often negotiating with credit card companies to get better interest rates. I took a very active approach toward minimizing my interest expense on my debt and learning to negotiate with credit card companies was a key component. I am a big fan of the debt snowball method for getting out of debt and you actually can use this as another tool to speed up the debt reduction process.
I gathered up a bunch of offers from other credit card companies. I would often get 0% credit card offers in the mail, so I just saved them up for a couple weeks until I had a few decent ones that I was slightly interested in. The reason I gathered these up was to have a baseline to negotiate from. These offers would more or less allow me to prove to my card company that I didn't need them, because I had other offers. I could have made these offers up, but I don't believe that lying to get what you want is ever justified - even to credit card companies.
From this point, I would make a list of all of my credit cards, the balances on each, the current interest rate and how long that rate would last (if it were a promotional rate).
Then I would grab the phone number off the back of the first card and start calling. (This is very important) Once I reached a customer service rep I would try to get their supervisor. You can try to negotiate a better rate with the front-line rep if you want, but in my experience they rarely can negotiate rates with you. Most of the reps I dealt with flat out told me "no". Either way, ask for their supervisor. Once you are talking to the supervisor, you are now talking to someone who has authority to negotiate rates (most times) and they often are much more rational and will talk to you like a human being.
Now that I had the supervisor on the line, I would argue my case in typical Matlock fashion. I would let them know that while I have enjoyed their business, I had three 0% offers from other credit card companies. I told the supervisor that I would love to stay with them, but if they couldn't provide me with a better rate I would be forced to go with one of their competitors. Just like you would expect, this worked with varying degrees of success each time. Sometimes they would offer me 0% for a fixed time frame, sometimes they would try to pacify me with a 1% rate reduction. But I will say that they ALWAYS offered me something. So even if I didn't get what I wanted, it was always better than not calling at all.
I had patience and was not afraid to leave, so if I couldn't get the offer I wanted from the supervisor I would just kindly hang up and proceed to transfer that balance to one of the offers I rounded up in step 1.
select one here...