Want Lower Credit Card Rates? Learn to Negotiate!

Large financial institutions strike fear into the hearts of most consumers. They shouldn't. Credit card companies, for example, are no different than any other vendor, and you should negotiate with them to get your best rate.

As a nation of consumers, we're accustomed to shopping around and finding the best price on items. Unfortunately, we're more prone to sweat the small stuff and miss out on the big picture.

Interest rates on credit cards are an example of an expenditure that tends to fall through the cracks. Most consumers could reduce their rate through simple negotiation. If you find that your interest rate is high compared to other cards, don't sit on your hands and wait for a benevolent credit card representative to come to your rescue. Instead, learn how to negotiate a lower rate.

A powerful position

Even the smoothest talkers won't get a lower interest rate if their overall credit score is horrible. The credit card business is a numbers game, and it's based almost entirely on your credit score. The better your score, the better your chance of a lower rate.

Before you start negotiating, take a close look at your credit report. Scour it for any mistakes, and pay down any debts that you can. The higher your score, the better chance you'll have of qualifying for better numbers.

Do some legwork

You'll have more negotiating power with your current credit card company when you use offers from other companies as leverage. Shop around on the Internet and find some great rates and appealing offers. You may even try to qualify for a new card. If the rate is superior to your card, make the switch. But before you do, phone your current company and let them know about your sweeter deal. Chances are good that the company will lower your rate to keep you as a customer.

Moving up the food chain

The old saying, "The squeaky wheel gets the grease" is applicable to the negotiating process. If the first customer representative denies your request for a lower rate, ask to speak to a supervisor. If that person turns you down, ask to speak to the supervisor's supervisor. With enough persistence, someone may give you the green light.

If that tactic doesn't work, call back regularly, and continue paying your bills on a timely basis. The combination of consistent inquiries and an improving credit score should eventually net you a new deal.

Consumers have never been shy about haggling for the cheapest microwave or used car. But for some reason, people tend to hold their tongue when it comes to negotiating for lower rates on credit cards. Don't hold back. Be smart and be prepared-if you're persistent, you'll be paying a lower rate before you know it.