Call your credit card company and ask for lower rates. Now

I just spent less than five minutes on the phone with Chase, my credit card company, and was rewarded for it with 4 points being knocked off my interest rate. Not a bad use of my time! I haven’t ever carried a balance, so the interest rate isn’t currently a big deal for me, but no one can predict what will happen in the future. I may soon start traveling a lot for work, and since I have to pay for everything and get it reimbursed later, I may end up carrying a balance for one month at a time.

The process was ridiculously simple. I called up, waded through a single robot menu, waited a few seconds for a human, told her I wanted to lower my rates, got transfered to the rates department, waited a few more seconds, and spoke to a man who was able to lower my rates within a minute. The dirty secret of the credit card industry is that all you have to do is ask for a better deal and you’re likely to get one. They’re willing to lower your rate over time as you prove to them that you’re a good customer, but since it’s money directly out of their pocket, they aren’t going to do it automatically. So all you have to do is ask, because by asking, they know you’re comparing rates and shopping around for a better deal, and they don’t want to lose you as a customer.

So, call your credit card company now, even if you don’t habitually carry a balance. Turn your card over, call the 1-800 number, and in less than ten minutes you should find yourself with a lower interest rate (unless you have problems making payments on time). And then call back again every 4-6 months to ask for a lower rate. That’s the approximate timescale of when they re-examine accounts and look for the rates they’re willing to negotiate downwards. The worst that can happen is they say no. It’s really that simple, and you’re stupid if you don’t do it, because you’re just throwing away money in the event that you ever carry a balance.

Don’t be naive and say “I’ll always pay it off in full every month” as an excuse for not doing it now — the future is unpredictable, and all sorts of events could cause you to find yourself short on funds, such as being laid off or facing large unexpected medical bills. And don’t think you can just wait until the situation ever arises when you need to carry a balance before calling for lower rates. When that time comes, you may already have a large balance, putting you at a disadvantageous negotiating position. And they’re only willing to lower your rates by so much each time you ask, so asking early and often will bring you down to a lower rate than if you just ask once right before you aren’t able to pay a bill in full.

Simply calling up and asking also works for increasing credit limits, decreasing annual fees, and possibly increasing rewards or benefits. It never hurts to ask, and you might be surprised with what they’re willing to offer you to keep you on-board as a customer. Of course, the better you are at negotiating, and the more you threaten to switch to another credit card company unless you get some of what you’re asking for, the better your chances of success will be. But even if you aren’t comfortable with doing that, simply calling up and saying “I want a lower interest rate” should pay some dividends.

2 Responses to “Call your credit card company and ask for lower rates. Now”

  1. Kelly Martin Says:

    Actually you should be careful about calling to increase one’s credit limit. Some card issuers charge a fee, in some cases a very substantial fee, for increasing credit limits. I saw one agreement where the fee for increasing your credit limit was 50% of the increase in the limit. So it can indeed hurt to ask.

  2. Cyde Weys Says:

    Well, it still can’t hurt to ask. Asking and then accepting the offer might hurt. But your advice is well taken. Rather than simply asking for a higher credit limit, be sure to ask if there are any stipulations that come with it as well (although they probably have to tell you about them, one would hope?).