Building credit from no credit or bad credit often seems to be a catch-22. Most credit card companies and lenders will not open an account for you or give you a loan if you don't already have an established credit history, but you can't establish a credit history without opening a credit card account or applying for a loan! Luckily... Read more
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Believe it or not, your credit card terms are not set in stone. One of the secrets to saving money is by reducing costs on the small things over long period of time. Getting just 1% shaved off your interest rate on your long-term credit can add up to hundreds, or thousands of dollars worth of savings. If you can prove to your credit card company that you are a responsible and loyal customer, you can often convince them to give you better terms.
Start strong From the moment you get your credit card, make sure to keep your account in good standing. If you are trying to recover from bad credit history, order a copy of your credit report from all three major credit-reporting agencies and resolve any issues that appear. Building a good credit report relies on five major factors: payment history, amount owed, length of credit history, types of credit and new credit. Keep these factors in mind as you sign up for accounts or apply for loans. For instance, opening many new accounts at once or using only one type of credit can appear bad on your credit report. To resolve issues, notify each agency in writing that you would like to dispute an item. Then, contact the businesses that made the false claim and let them know you are disputing the charge and that they will be contacted by the agencies. Once the matter is resolved, make sure that a note is put on your credit report stating that the issue has been taken care of. Next, open up your account and make sure that you always make your payments before the due date. Pay off your entire balance each month in full to avoid interest rates. If you are going to be late on a payment because you lost the bill or the mail is delayed for some reason, call your company immediately and let them know. Chances are they might let a late fee slide if you are prompt and courteous in your handling of the matter. Once you have kept your account in excellent standing for two years, you are ready to begin negotiating. Gather your records on your account history so you can reference them quickly. Compare Do some research of competing credit card companies. Find cards that are comparable to your cards with lower interest rates or better terms and compile a top 5 list. Make a table of each cards strengths over your current terms so you can cite specific examples of terms you want to your credit card company. Pay close attention to fixed rates rather than introductory rates when comparing credit cards. Introductory rates are designed to hook customers and then they are hiked up after a certain period of time. Also, take a look at different rewards programs other companies are offering. Your own program may be outdated, even compared to cards from your own company, so be sure to bring up these issues when negotiating. Talk to the Retention Office The first wave of customer support is usually on the lowest rungs and have no authority. If you are talking to someone who seems to be reading off a script and keeps trying to pitch things to you or talking in circles, ask if you can be transferred to someone else. Usually, the people that have the final say in your credit card terms is the retention office. Once you get connected to customer service, ask if you can be transferred to the retention office before stating why you are calling. Only give them as much information as they need to direct your call, otherwise they may try to steer you away or waste your time. Once you are speaking with someone in the retention office, let them know why you are calling and let them know you are an excellent customer. Rather than making demands, present them with the terms you would like along with evidence that you are a reliable and loyal customer. Overall, while negotiating avoid making threats or bluffs. Once upon a time when the customer was always right, customers could make threats to cancel their accounts or worse, take their business to a competitor and companies would respond quickly. However, credit card companies are now hip to the game and will either call your bluff or have a stock answer for threats like those. Even if they don't, making threats will quickly throw your credit card company on the defensive and make them far less willing to help you. Instead, let them know that you enjoy the services that the credit card company has give n you thus far and would like to continue giving them your business. Let them know you have been very happy with them and coyly imply that there might be something that might sway you into staying with them. Make your presentation a mix of flattery and a display of responsibility and your credit card company will be far more likely to honor your request.
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