Be a Savvy Bargain Hunter: Try Credit Card Shopping

Lowering the interest rate on your credit card used to be easy. It was a buyer’s market and, because the competition was fierce, credit card companies offered great deals, plenty of rewards, and low interest rates to try to attract business. If you didn’t like the rate on your card you could easily switch providers for a better deal.

Then the recession hit. Rules were tightened and offers were less prodigious because of the economic situation. Recently, however, as the economy has begun to pick up again, these companies have begun offering better deals and more competitive rates, returning a tiny bit of negotiation power to the consumer. Here are a few tips on how to negotiate a great rate.

To start with, do some research into exactly how high your interest rate is. Take a look at the annualized percentage rate listed on your card’s statement. Compare that rate to what your provider is offering to its new customers. Often there is quite a discrepancy here and your provider could be providing you with a much better rate.

Go online and compare your rates against the national averages. Even though credit card providers usually offer comparable rates around the country, they may have slightly higher or lower rates for specific services such as cash advances, balance transfers, and purchases. Check out the national averages for all the services you receive and find out which of them you are getting at rates that are above the national average.

Before you make the call to your credit card provider to try to negotiate a lower interest rate, it’s important that you find out your current credit card score and compare it against the interest rate that others with that score receive. You can order your report by mail or phone but online is the quickest way to go. Once you have your score in hand, check it against the interest rate you should be receiving for that score. If the interest rate you are receiving is below the recommended interest rate for your score, make sure to mention it when you call your provider.

If, however, you have a poor score or a bad credit history report, it may be better to lie low for a while. Only try to negotiate for a better rate if you are in a good position to do so with a respectable credit history.

When you finally make the call to your provider, use all the information you were able to gather in your research. Tell them about the offers their competitors are making and see if they will offer you the equivalent in order to keep you as a customer. If the person you speak with initially is unable to help, see if you can speak with a supervisor. The key is to be polite but persistent in your phone call. If you come well prepared and don’t take their first no for an answer, you will often be able to negotiate a much better interest rate.

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