In my last post, I discussed some of the ways that you could use credit cards to actually save money in the long run. Now, if you are using credit cards for a majority of your purchases (or even if you are not), there is a very easy way to save money very quickly: ask the company to lower your interest rate!
Credit Card Companies Need You More Than You Need Them
If you are using your credit card the right way (more like cash than like credit), having a lower interest rate shouldn’t matter since you are not incurring any interest. But you never know when you may have to pay something off in two or more months rather than one.
Let’s get one thing very clear – credit card companies don’t make money unless you use their card (duh). So they want to retain your loyalty as much as possible. Have you noticed how much advertising these companies pay for just to get you to use them? It’s absolutely insane the amount of money they spend trying to make you a cardholder.
Throw Your Weight Around
Because you are the bread and butter of the credit card company’s entire enterprise, leverage their need for your loyalty by getting the rate that you deserve. It’s not that hard, all you have to do is call them and ask for a lower interest rate. Here is an example of a successful strategy that I use:
Credit Company: Thank you for calling the Credit Company. This is John, how may I help you?
Me: Hi John, this is Dean Soto. How are you today?
CC: I am fine Mr. Soto. What can I do for you today?
Me: Well, I recently got your card, and I wanted to use it as my primary means to pay off my bills because I like the reward points I get when I use it. But, I have another card that has a lower interest rate (hopefully this is true, or you will need to go to confession). Is there any way that I can get the interest rate lowered on my card?
(Credit companies like to know that they are your primary card choice.)
CC: Alright Mr. Soto, let me see if I can help you.
(Typing on the keyboard)
CC: Okay Mr. Soto, we were able to lower the interest rate to <insert percentage here>, does that satisfy you?
Me: Great! Yes it does, thank you.
(The credit representative will usually try to sell you something else now. Just decline it.)
CC: Is there anything else that I can help you with?
Me: Nope. Thank you very much.
It is usually that easy. They will typically lower your interest to whatever the market interest rate is, or try to beat or match the interest rate on any competitor’s card you may have.
What If They Say No?
I have only had one card company ever refuse to lower my interest rate. However, they did double my reward points for 90 days. In addition, after the 90 days were up, I called back to ask if they could lower my interest rate again and they did. I think getting double points and a lower interest rate is quite a success.
Don’t be afraid to call your card company. You are their customer, and they depend on you for their survival. They will not lower your interest rate out of the kindness of their heart, you need to prompt them. The worst they can do is say no, and typically they won’t because they can’t afford to lose a good customer. So get on the phone right now and get your interest rate lowered!
credit card, credit card companies, interest rate, Money, using credit cards
mirandaemde
September 10, 2009 at 8:50 amHahaa, I love the example conversation.. I've been meaning to do this, and now I WILL! And, if it doesn't work, it's all your fault! haha jk!! Awesome. Very helpful.
Dean Soto
September 10, 2009 at 9:39 amHaha, use your innate power of persuasion! Don't blame me if you ain't got it goin' on!
shaunmatyas
December 31, 2009 at 12:17 amI have done this and it works. Yeah to saving money!!! Not only with credit cards. Don't stop there! I received a $15 per month discount on internet because I told them I was going to switch from Time Warner to Verizon. I had my phone bill reduced by complaining about additional fees. I talked my way out of 6 over draft charges from the Credit Union $100+ yikes. Our rent is now $150 less this year by negotiating with my landlord. I like how you think Dean. The markets are competitive right now for consumer business and generally negotiate to keep you happy. Great article!
Dean Soto
January 3, 2010 at 9:20 pmGreat points! You can pretty much save money on any service just by asking. It’s not hard, but most people don’t do it. It’s amazing how Americans are so used accepting prices at face value, while most other cultures haggle like nobody’s business.