How to Prepare Before Negotiating Credit Card Rates

If you’re working hard to rebalance your debt load and reduce expenses, consider negotiating your credit card rates with each credit card company. Even if you are eligible to receive a promotional rate or a “teaser” rate for the first 90 days or six months, you may still have the ability to negotiate credit card rates and get a better deal. Many people don’t know how simple it is to go through this negotiation process and some hesitate from negotiating altogether. If you want to keep your credit card balances at a minimum, it is in your best interest to negotiate rates.

Here are some things you will need to do before you go through the negotiation process:

Review Your Credit Report in Detail

Make sure you are aware of any errors or mistakes that are on your credit report and fix them as soon as you can. Remember that credit card companies may review your credit report periodically and will always pull it when you request a new account, or when you want a rate adjustment. If you do find some mistakes, you may need to wait a few months for these to clear and will need to hold on the negotiation process until that time.

Take a Good Look at Your Credit Card Terms

If you have applied for a card based on a promotional offer or reduced rate, make sure that you are negotiating for a lower regular rate when the promotional period is over. Take a close look at the credit card agreement and determine what rate you will be subject to when the 0% APR or other credit card rate offer expires.

Make Sure You Are Making Payments Consistently

Your credit card company may be more likely to offer a reduced rate or other incentives when they see you as a “low risk” customer. This means you need to have a good track record of paying on time. If you’ve payments in the last few months, hold on negotiating until you can prove that you can make your payments on time for at least six to eight months.

Be Specific About Your Proposed Rate

Consider the impact of a rate that is a couple of percentage points lower than your current rate, versus a few points. If you are only negotiating for a couple of points on an already-high interest rate credit card, it may not be worth your while. Be specific about what rate you would find acceptable based on the negotiations and take it from there.

Do Some Research

Find out what other credit card companies and banks are offering right now so that you have some negotiating power. Let your current credit card company know that you are shopping around and if you could, consider transferring balances to another credit card. Be confident and assertive so that you can get the best possible rate for your account.

Negotiating credit card rates isn’t always easy but there are several things you can do to increase your chances of getting a better rate. Use these tips to prepare yourself for the negotiation process.