Yes, you can negotiate a lower credit card interest rate
I am obsessed with negotiating.
But, look, I get it: It’s one thing to TALK about negotiating and a whole other thing to actually DO it. So, I put my tips to the test. I asked my new website guru, Marisa, to negotiate her current credit card APR (annual percentage rate), which was recently raised to a whopping 29.99%. (Lots of credit card companies hiked rates in a last-ditch effort to make money before the CARD Act restricted them.) However, the average APR is currently about 14-16%, so if yours is higher, there may be room to haggle.
At first, Marisa called and negotiated without any coaching:
Marisa: Is it possible to get a lower APR?
Rep #1 (annoyed): 29.99% is lowest rate we offer right now.
Marisa: Do other cards with this bank offer lower APRs?
Rep #1: I’m not sure. Please hold while I transfer you to our applications department.
::Disconnected during transfer::
The second time, she negotiated with tips from me:
Marisa: I’ve been a member since 2004. I always pay on time and in full, and I’m not carrying any debt. However, my APR was recently raised to 29.99%, and I have card offers as low as 12%. What can you do so I keep my account with you?
Rep #2: I have two options. We can offer an APR of 21.99% for 6 months on current and new purchases, effective immediately. Or, we can offer a 9.99% APR for 6 months on new purchases only, effective Friday.
Marisa: I’ll take the 9.99% APR and call back in 6 months. Thank you!
Not bad, huh? Granted, Marisa was able to negotiate easily because of her impeccable track record: paying on time, in full, and debt-free. In fact, her high APR only affected her a few times when she was late on payments. And, remember, lateness not only costs you interest and fees, but also a hit to your credit score.
For ANY negotiation in ANY situation, read my latest column in the July issue of Redbook, where I give you the bible of negotiating – think credit cards, cars, salary, rent, health care, and travel. Or, listen to my tips on public radio’s “The Takeaway” before you bargain everyday costs like hotel rates and medical bills or negotiate big stuff like salary or a raise.
Give it a whirl and let me know how it goes.