Top Tips to Negotiate Your APR

Written by , October 20, 2011

Top Tips to Negotiate Your APRCredit cards offer a great deal of convenience and give us access to credit at a moment’s notice. So why do so many people think they’re evil? One reason is because they often come with a high APR (annual percentage rate).

Since lending money through credit cards is somewhat riskier than making a one-time loan, banks charge higher interest on them. If you carry a balance, that interest can add up in a hurry. And if you’ve made late payments or gone over your credit limit, you could be paying high double digit interest rates. What many cardholders do not realize is that it is possible to negotiate a lower APR.

Here’s some information and advice on how to negotiate your APR.

  • Look for better deals. Before you talk to your credit card company, try to find other cards that offer lower interest rates. If you keep your junk mail for a week you’ll probably find several offers. Keep the offers or write down the companies and rates to use as bargaining tools.
  • See what APR your credit card company is offering new customers. You can most likely find this information on their website. Write it down as well. There are also sites that compare credit cards from many different firms that will allow you to see what competitive offers may exist in the marketplace. You can use this information in your negotiating process.
  • Check your credit report. Make sure that the company you will negotiate with has accurately reported your payment history and account status – if they haven’t, their records are probably incorrect and you’ll need to get that straightened out before you ask for a lower APR. Check your other information, too, because they will probably consider it when making a decision. It’s also a good idea to get your credit score so that you can use it in negotiations.
  • Make the call. Call your credit card company’s customer service department, and navigate the automated system until it connects you with a live person. Be courteous, and state that you would like to discuss lowering your APR.
  • Make your case. Tell the representative about the lower APR offers that you’re eligible for. Mention the interest rate they’re offering new customers. Point out what a good customer you’ve been and how wonderful your credit history is. Use whatever you can think of to your advantage.
  • Ask for a supervisor. If the representative won’t lower your rate (or refuses to lower it as much as you’d like), ask to speak to a supervisor. Restate your case, and remain friendly and courteous. Supervisors usually have more leeway when negotiating, so you may very well get what you want.
  • Be prepared to cancel the card. If all else fails, threatening to cancel the card might get you a better APR. Politely tell the supervisor that you’ll have to transfer your balance elsewhere and cancel if you can’t get a lower rate. If he bends, great! If not, ask to be transferred to the cancellation department. They will try to talk you out of canceling, and they might offer a lower rate. If not, consider actually canceling if you can transfer the balance to a card with a lower rate.
  • APRs are rarely set in stone. If you’re a good customer, your chances of negotiating a lower rate are pretty good. And even if you have had credit problems, it never hurts to try. You could save yourself thousands in interest over the years.

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