Negotiate Terms

By Curtis Arnold (US Citizens for Fair Credit Card Terms, Inc.)

Any terms are negotiable, from interest rates to rewards. The better your credit score and payment history, the more clout you have. Start by talking with a customer service representative. If he/she can't help, ask to speak with a manager. Arm yourself with knowledge about offers from rival card issuers. CardRatings.com compares rates, fees and rewards for dozens of cards. Be polite but persistent and you can negotiate...

Interest Rates. If your credit score is 730 or above, you shouldn't be paying more than 9% in annual interest. Card issuers will frequently lower the rate by two to five percentage points immediately.

Annual Fees. Most issuers will waive the first year's fee, but always ask for another waiver in year two -- it is often granted.

Late fees. If you ask, issuers will usually forgive one or two late payments a year, especially if you make a payment immediately by phone or online. Also, if a fee is imposed for exceeding your credit limit, ask to have it waived and ask the issuer to automatically decline new charges that exceed your credit limit.

Credit Line. If an issuer lowers your credit limit, call and say "this doesn't work for me." In this tight credit environment, only the most creditworthy customers will succeed but it’s worth trying.

Rewards. If your issuer gives you cash rebates of only 1% on what you spend, ask for more. Various issuers have been known to raise rebate levels, at least temporarily.

Balance Due. If you are carrying a substantial balance and having trouble paying it off, ask whether the issuer is willing to stretch out payments. Some card issuers may even accept less than full repayment if you agree to settle within a certain time.


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Bottom Line/Wealth interviewed Curtis Arnold, founder and CEO of US Citizens for Fair Credit Card Terms, Inc., which educates consumers about credit cards, based in Little Rock, Arkansas. Its Web site, CardRatings.com, features consumer reviews of credit cards. Arnold is author of How You Can Profit from Credit Cards (FT Press).