Negotiating With the Credit Card Company: A Beginner’s Guide

Nicolas Cesare
You can negotiate with your credit card company

These days, it seems like big companies hold all the power over just about every aspect of our financial lives. If Pepsi says that a drink costs 99 cents, then it costs 99 cents — there’s no haggling back and forth, I can’t propose a price of 85 cents, and if I want that drink, you’d better believe that the only way I’m going to get it is Pepsi’s way.

For this reason, many people might be surprised to learn that some things are still negotiable when it comes to money. You’ll probably be even more surprised to hear that one of the most negotiable things in your financial life is your credit card account. That’s right, you can negotiate with credit card companies. If you choose your words carefully, you may find that they’ll listen as well.

It’s possible for an average consumer such as yourself to take the fight to your credit company on things as small as miscellaneous fees or as big as settling credit card debt. Find out how you can negotiate with a credit card company to get the best deal on your credit cards.

Why You Can Negotiate With Credit Card Companies

To most of us, credit card companies seem like an unapproachable monolith. You might think: could I really negotiate with a credit card company? Why would they possibly bother talking to me?

The answer to these questions is simple: credit card companies want to make a profit. One of the ways that credit card companies make money is by collecting fees from customers, it’s true. However, vastly more important in the grand scheme of things is the money that credit card companies collect from retailers.

You see, retailers these days almost have to accept credit cards as payment. They’re just so common that it would be foolish for most retailers to cut off more than 75 percent of the potential customers. Credit card companies know that their services are in high demand, so they charge retailers all sorts of fees for the use of their cards.

However, company X’s credit cards will only be in high demand by retailers as long as many consumers carry them. If hardly anyone who goes shopping is carrying a company X’s card in their wallet, then it’s hard for retailers to justify paying company X’s fees. The upshot is that credit card companies are very, very interested in retaining their cardholders — that means you! Credit card companies must work hard to keep their cardholders satisfied, thereby making their brand more attractive to retailers.

The economics of credit cards can be complicated, but the bottom line is this: credit card companies need their cardholders and they are willing to waive small fees and settle on debt payments if it means retaining the strength of their brand. So credit card companies are definitely willing to negotiate, but just what sort of things are on the table?

The Small Stuff You Can Negotiate

A lot of the details on your credit card account are established by some template that the credit card company employs. They’ll look at your background and your credit score and instantly try to fit you into a particular mold, with a particular credit card and plan. However, you don’t need to remain restricted by the type of account your credit card company assigns to you. Here are some small ways that you can change your account in your favor by negotiating with your credit card company.

Credit Card Fees

Surprisingly, you don’t always have to pay all of your credit card fees. Certain fees are up for negotiation if you meet certain conditions. Remember that credit card companies are more interested in having you as a regular user of their card than they are in collecting some miscellaneous fee.

One of the best fees to negotiate your way out of is the annual fee. Talk to your credit card company about waiving your annual fee as long as you meet certain conditions, such as charging a certain amount to your card each year.

Get a Higher Credit Limit

Your credit limit is the amount of money that the credit card company is willing to let you spend each month. Whether or not it’s high or low depends on how trustworthy the company thinks you are as a borrower. If you have a high credit score and they expect you to pay your balance early and often, then they will be more willing to give you a higher credit limit. People with bad credit, on the other hand, are likely to severely limited in how much they can borrow each month. This is one of the reasons why it’s so important to get your credit score repaired if it’s low.

If you think that the credit limit that your credit card provider stuck you with when you opened your account is a little low, you might think about negotiating for a higher credit limit. However, beware that asking for a higher limit and failing could lower your credit score. This is because the company will often perform a hard inquiry on your credit report upon your request. Too many hard inquiries in a short period of time can hurt your credit. On the other hand, getting a higher credit limit without increasing how much you charge to your credit card can lower your credit utilization ratio — that may give your credit score a modest boost.

So when is the right time to ask for a higher credit limit?

  • When you start making more money. When your income goes up, your credit card company will feel more assured of your ability to pay your credit card balance. This will make them feel a little better about lending you more.
  • When your credit score has improved. If your credit score has gone up since you opened your account or since the last time your credit limit changed, then you are in a stronger bargaining position to ask for an increase.
  • When you have had some good history with this company. If you have shown your credit card provider that you can hit your payment month over month consistently, then they will be more open to raising your credit limit.

Negotiate a Lower APR

APR (or annual percentage rate) is one of the most talked about elements of any credit card account. Your APR determines how much interest you will have to pay on the outstanding balance of your credit card account each month, so it’s always better to have a lower APR.

APR is another one of those things that depends on your credit history. If you bad credit history, then credit card companies will want to give you a higher APR. For them, this is supposed to offset the risk of bringing on a less reliable borrower.

The best thing that you can do if you want to negotiate for a lower APR is to improve your credit history. This will show credit card companies that you’re less of a risk and help you save more money on interest payments.

Get Better Rewards From Your Credit Card

Rewards are the main draw for many cardholders. It’s always great to get a card with high quality rewards and it’s not uncommon for consumers to ditch one card in favor of another that has rewards more to their liking.

Remember that credit card companies are very eager to keep you on as a customer. If you think that you can get better rewards from another company, don’t be afraid to mention it. You may find that your credit card company would rather give you better rewards than lose you.

The Big Stuff: Negotiating Credit Card Debt

It’s very uncomfortable to owe credit card debt to a company. Not only will having such debt be disastrous for your credit score, but you will also have to make difficult payments and budget very carefully in order to pay the debt off.

The good news is that you may not have to pay your debt in full. Consider the bottom line for credit card companies: they just want to get paid. They would probably like to receive the full amount of your debt, but they also want to be realistic. If you genuinely cannot pay off your credit card debt, it’s not unreasonable to call up your credit card company and try to settle your credit card debt. Explain that you can’t pay the full amount, but meet them halfway and find an amount that you can afford. Debt settlement agreements may sound like a tricky subject, but it can end up being a win-win for you and the credit card company.

Negotiating with your credit card company doesn’t have to be scary. Understand that you are valuable to them as a customer and go into negotiations with a strong credit history and you may be surprised at what your credit card company will do for you.

Trying to get the best credit card possible? You can find more tips and guides at our credit card resource center. What’s the “credit” part of a credit card? Find out at the credit score learning center. Need more help writing letters to your creditors? Visit our letter template resource center.

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