Living with credit, Protecting yourself

5 secrets to taking charge of your relationship with your credit card issuer

Philip Taylor

This is a guest post from Philip Taylor, founder of the website PT Money: Personal Finance and the Financial Blogger Conference, the second of which will take place in September 2012 in Denver.

Your relationship with your credit card issuer is a lot like your relationship with the opposite sex. While everyone knows that there are definite, hardcore, non-negotiable rules to courting, dating and marriage, most of us also know that there are many unwritten rules that, if followed, will increase your chances for a successful, loving relationship.

What many people don’t know is that there are a few unwritten rules that apply to the relationship you have with your credit card company, too. Most credit card issuers try to keep this information under wraps because, like a jealous partner, they want to keep the upper hand in the relationship. But, by employing a few of these tips, you can shift the balance of power back into your favor and save extra money in the process.

1. You’re the boss.
No, really. Your credit card company would be just another face in the crowd if it weren’t for you. This means that you have the power to dictate the terms of your relationship with them and not the other way around. Of course, having a great credit score increases your ability to negotiate great terms and rates on your card, but even people with less-than-perfect credit can request changes that can ultimately impact your bottom line.

The one thing you have to understand here is that empty threats won’t go far. If you threaten your credit card company with an ultimatum, you will have to be willing to follow through with that threat. Otherwise, you will lose your power position and become less effective in any future negotiations.

2. You don’t have to pay more than your fair share. The best way to catch the eye of your current suitor is to flaunt the competition in their face. If your credit card is costing you too much to carry, employ this method to help rid your account of excess baggage such as high interest rates as well as annual and other ancillary fees.

My mother used to always tell me that catching flies was much easier with honey than with vinegar. And, while this old adage never made sense to me in the most literal sense, I’ve found it to be a very accurate way of describing a great negotiating strategy. When calling your credit card company to ask them to lower your interest rate, your best strategy is to remain calm, be polite and ask them to lower your rate so that it is in line with another, really great looking credit card offer you’ve recently received.

Play the loyalty card, mentioning how you really like where you are and since you are already well established you’d rather just stay put. If you’ve been a really great customer, the odds are in your favor on this one, as your credit card company should go the extra mile to keep you. But if you’ve been consistently late, gone over the limit a lot, or simply been a bear to deal with in the past, you might want to let a little time lapse before trying this one.

3. You can play hard to get before settling down. This one requires a little finesse on your part, but a little confidence will go a long way to getting you the best terms from the get go. With offers from some competitors in hand, contact the card company you want to open an account with and explain, nicely, to the service agent on the other end of the line that you would really love to open an account with his or her company, but that darn annual fee, higher interest rate or ancillary charges just makes it so hard. Reference the other offers you have and request that the company you’re courting waive the fees or lower the rates to match.

4. You are allowed to be late on occasion. This one works best if you aren’t a habitual late payment offender. As in tip No. 2, you are asking the company for a favor — a favor that will actually take money out of their pockets and put it back into yours. This means that you will need to be particularly endearing in order for this to work. Contact your credit card company and, as sweetly as possible, explain to the service agent on duty what the situation was for your lateness. Then, ask for the late fee to be waived. In many cases, the fee will be refunded and your good payment history will remain unmarred.

5. You can request that your credit card company have a more vested interest in your relationship. The trick for getting your credit limit increased is to not sound as though you are desperate for the extra cash, even if you are. This is a surefire way to ensure that you don’t get your limit increased.

When you contact your credit card company to ask for a credit limit increase, citing your long-standing good payment history with the company (if you have one), a raise or other increase in income, or stable employment record will go a long way to helping you get the extra funds you want. Confidence is the key to getting this one done.

The main thing to remember whenever you approach your credit card company to ask for a decrease in fees or an increase in spending ability is that the company needs you in order to stay in business and be profitable. You may not feel as though one person can make a difference to a company, but you can rest assured that your credit card company knows it. And if they don’t, you’re better off looking for someone who will appreciate you anyway.

See related: How dating and getting a credit card are alike, How to shape up from your finances in 12 months

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  • Great tip on number 4. I did a post on this very topic recently. Too often we hear stories from clients about when they really got into it with the customer service rep. We always remind them that if they pay late their creditor doesn’t owe them anything. If they choose to waive the fee they are absolutely doing you a favor.