Ask Kim
Lower Your Credit-Card Rates
One reader shares his strategy for successfully getting three major card companies to roll back rate increases on his cards.
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
November 29, 2007
I read your article about Coping With Credit-Card Rate Increases and was wondering if there's any chance I can talk with my credit-card companies and try to get them to lower my rates? I know that you've recommended that strategy in the past.
You're right -- it never hurts to ask the credit-card company if it will lower your rate. Sometimes it works; sometimes it doesn't.
The strategy worked quite well for reader Sam Sweet of Erial, N.J., who recently succeeded in getting three major card companies to roll back their rate increases on his cards.
He had received a notice from Capital One explaining that his 7.9% rate was about to rise to 12.9% -- but called and got the rate lowered back to the original 7.9%. He also got the rate on his Chase card lowered from 17.9% back down to the original 11.9%. And the rate on his Washington Mutual card was about to rise from 12.9% to a massive 23.9%, but he ended up with a 11.9% rate after he called (he says that one was the easiest call).
What's his secret? He has the leverage of a great credit record. He's had each of those cards for more than two years and has never made any late payments or been charged over-limit fees.
And he is also very persistent and uses the same procedure every time. First, he calls the customer service number and asks for the lower rate. "Naturally, they say there is nothing they can do," he says.
They tell him that he can opt out, he says, and pay off the balance at the old rate as long as he doesn't make new charges -- then close the account when it's paid off. But he wants to be able to make new charges at the low rate, without those restrictions.
Then he asks for a manager, who generally says there is nothing he can do, either. "I tell them there is something you can do ... you are just choosing not to." He gets upset enough to show that he's frustrated, "kind of a controlled rage. But don't ever curse." That conversation can last for a while.
Next, he searches the company's financial records and finds the phone number for the corporate office (you can find the company's Securities and Exchange Commission filings by looking up the stock on Kiplinger.com). "Ask for the president," he says. "If you know his name, that is even better. You can get both from the SEC documents. Be stern and firm about it. When asked why, explain that you can't believe that they have such horrible customer service."
At that point, he's usually transferred to Escalated Customer Service. "Here you tone down your act and say you can't believe that the company treats consumers this way and that there are other companies that want my business,” says Sweet. "Always remember to be nice here."
The next step is the same every time. "They will say they need to look into it and will get back to you," he says. "They always do. I figure it's during this time that they look at your account and see how much money they will lose if you go elsewhere. That is why I assume that having perfect credit with them is important."
"Those steps have worked every time," he says. "The total process takes about half an hour to call customer service, 15 minutes to call the corporate office and explain everything, and the follow-up call usually takes about ten minutes. So give it an hour of your time to keep the lower interest rate."
Reader Comments (4)
Posted by: monique at 11/29/2007 12:32:44 PM
I've never had to go to that much trouble to lower my credit card rates. Maybe American Express is more accommodating. I have three cards with them. I just call, speak to a representative, ask them to lower it and they do. Then I ask for a limit increase and I get that too. Yes, I have a good credit history.
Posted by: Marc at 12/01/2007 02:20:27 AM
Same here Monique. I've never had any problems asking for a lower credit rate. I've got three cards from different places, 2 of which have been at 8.9% APR and the other at 7.9% APR for about 5 years now. I simply called the credit card companies every year to see if they could offer me a better interest rate to eventually get them down to that price. I've never had to raise my voice or anything - they were all very accomodating, even with limit increases.
Posted by: Lois Munroe at 12/04/2007 12:55:40 PM
Trying to get Chase to work with me has been almost impossible. I have tried negotiating for months now to no avail. I tried the phone method several times and was finally told to put it in writing. After getting two form letters, not addressing the point, I called once again and was told they could not combine the two accounts or lower the rate because I was not eligible but they would not tell me why or what I needed to do to become eligible and I would be getting yet another letter and would not talk to me further. I did get another letter and at this point my rate was lowered on one account to 13% but they refused to budge lower than that on either account. Both accounts are closed and I've never been late on a payment. I have excellent credit. At this point I feel they have won. I am beside myself.
Posted by: ritu at 07/29/2008 03:50:10 PM
Most people will get lower credit card rates by talking to the issuing company/bank. But if they cannot get the rates lowered, they can always apply for new credit cards with lower rates, transfer the balances from old credit cards and thus have the same result...