Today’s money hack is related to cutting your outstanding credit card debt by negotiating a lower interest rate.
We’ve mentioned the very real possibility of getting credit card companies to lower the interest rate charged on your credit card in order to make debt repayment a bit easier. In most cases, all you have to do is ask them to lower the rate and they comply, but sometimes you may need to use some negotiation techniques. Today we share one of these techniques that will make it more likely for the credit card company to help you out rather than turn a deaf ear to your request for a lower interest rate.
Negotiation Tip # 2 for lowering credit card interest rates on outstanding debt: Highlight your loyalty as a consumer.
This method only works if you have used the same credit card for many years – enough to build a user history record. Most companies these days reward loyal customers as a way to prevent competitors from stealing market share and credit card companies, like any other profit oriented business, are always looking for a larger market share.
You can call up the bank or visit their office personally and tell them about your intention to repay the credit card debt and that as a loyal customer who has used their credit card facility for years, you would be pleased if the interest rate charged on your credit card debt were to be lowered. You can state that as a reward that you would value in return for being a loyal credit card customer, or as an incentive for you to repay your debt quickly.
Customer loyalty can be a bargaining chip with credit card firms.
Companies these days thrive upon the idea of customer loyalty (Source: Customer Loyalty Programs That Work – Harvard Business School) and the same applies to financial firms, whether they sell credit cards or other financial services. Keeping that in mind, your chances of getting a favorable interest rate are better if you have been a loyal credit card user for your bank or credit agency.
As mentioned in the article we linked to above, 75% of customer requests to have their credit card interest rate lowered are complied with, so do not shy away from simply asking and building a good case around your request.
The next article shares the second negotiation technique for lowering the interest rate charged on your credit card debt.
Further reading: How to Retain Credit Card Customers – Database Marketing Institute