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Step Five: Negotiate Lower Rates

This content is provided courtesy of SavvyMoney.

Credit card companies recognize it’s cheaper to keep an existing customer than to acquire a new one.   Card holders who call their issuer to ask for a lower rate are successful over 50% of the time. However, issuers won’t do it willingly—after all, they like your interest payments—so you’ll have to negotiate. If you are in the situation where you are being deployed you have even more leverage to negotiate your rate under the Service members’ Civil Relief Act (SCRA). Let’s show you how to negotiate your interest rates. 

Negotiating a new rate with your credit card issuer can save you a ton of money. Not only will a lower interest rate lower the total cost of credit, it will take you less time to pay off your debt. Be sure to adjust your interest rate if you are being deployed. You have the right to a 6% interest rate on your credit card during your deployment period.
 
How Do You Negotiate?
Before you make the call, do your homework. Know if you are a good customer, what other offers are available, how your credit is, and what your payment history has been. You should also have handy the Department of Defense link that allows credit card companies to verify  a members' status. 
 
Know your target interest rate and rehearse your script. Here’s a sample script you can use:
 
Hello, my name is _______________. I have been a cardholder since ____. In the past few months, several credit card companies have offered me lower rates than my current rate with you. I value my relationship with you, but I would like you to match the other offers that I have received and reduce my interest rate by ___%. Are you authorized to adjust my interest rate?
 
Sometimes things don't go as planned and asking questions can be the quickest way to find other options or alternatives.
 
If your customer representative is difficult, as questions instead of arguing to understand if there are options that you may have missed:
 
·         "Are you authorized to lower my rate?"
·         “Do you have any discounts available to armed services families?”
·         "Are there other people who have the authority to lower my rate? May I speak with them?"
·         "Do you have a promotional rate that I can take advantage of?"
·         "What would I have to do to get a lower rate? Can I call back later when I meet those criteria?"
·         "Can I qualify for a hardship program?"
 
To get an example script, see success rates by issuer, and see how lowering your interest rate can affect your bottom line, use the rate negotiation calculator created by SavvyMoney.
 
 
Next, you’ll learn how and where to find extra cash.
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