Personal Finance

How to renegotiate credit card rates?

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[OP]
Deal Addict
Dec 12, 2009
4693 posts
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Toronto

How to renegotiate credit card rates?

I've read it in a number of places - call up and ask for a lower rate. It can't be that simple, or is it? I've searched this forum and can't find a discussion on it.

So how does it really work?
Are some banks and CC companies more willing to do this?
If so who? What has your experience been?

Is there a better time to do it?
For example, when your utilization is below a certain percentage? When you have a pre-approval from another provider?

Please share your knowledge and experience.
24 replies
Member
Oct 16, 2014
221 posts
137 upvotes
Moncton, NB
Mbna has à low rate card, rate will be based on your credit bureau. As low as 5%. Other banks offer low rates credit cards (<10%). You can also ask your bank and any competitor bank to quote you a rate for a Line of credit or a loan on which you'd transfer the balance of the higher interest cards. Provided you don't max out the cards after, this is a viable option. Also consider Borrowell, Mogo and Grow (Grouplend). They all offer flexible low interest loans.
Deal Guru
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Mar 23, 2008
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Edmonton
ROYinTO wrote: I've read it in a number of places - call up and ask for a lower rate. It can't be that simple, or is it? I've searched this forum and can't find a discussion on it.

So how does it really work?
Are some banks and CC companies more willing to do this?
If so who? What has your experience been?

Is there a better time to do it?
For example, when your utilization is below a certain percentage? When you have a pre-approval from another provider?

Please share your knowledge and experience.
Many companies offer multiple products. Products with more features will often cost more (duh). So, if you're willing to drop the cash back or rewards, you can often switch to a low interest card. It all depends on what's important to you.

Other than that, no idea.

C
[OP]
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Dec 12, 2009
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Toronto
hyacinthe wrote: a Line of credit or a loan on which you'd transfer the balance of the higher interest cards.
CNeufeld wrote: So, if you're willing to drop the cash back or rewards, you can often switch to a low interest card. It all depends on what's important to you.
I was hoping for more responses so the information might help others in finding ways to reduce their rates.

Between the 2 of us we have 3 cards
BMO Airmiles MC (30yrs)
CT Options MC (15+ years)
CIBC Select Visa (15+ years)

< 5 years on the mortgage - 1 renewal to go
Heloc at a good rate.

Yes we've paid through the nose for being students, starting up business, buying the first house, getting married, major vet bills, having 2 cars and so on. The time has come where our being a credit risk is much less and that we should be taking advantage of finally reaching that point. Current credit utilization is < 30% across the board.

The thoughts are to see who will drop their rates. Then with the help of the heloc or balance transfer deals pay off the highest to the lowest.
Member
Oct 16, 2014
221 posts
137 upvotes
Moncton, NB
ROYinTO wrote: I was hoping for more responses so the information might help others in finding ways to reduce their rates.

Between the 2 of us we have 3 cards
BMO Airmiles MC (30yrs)
CT Options MC (15+ years)
CIBC Select Visa (15+ years)

< 5 years on the mortgage - 1 renewal to go
Heloc at a good rate.

Yes we've paid through the nose for being students, starting up business, buying the first house, getting married, major vet bills, having 2 cars and so on. The time has come where our being a credit risk is much less and that we should be taking advantage of finally reaching that point. Current credit utilization is < 30% across the board.

The thoughts are to see who will drop their rates. Then with the help of the heloc or balance transfer deals pay off the highest to the lowest.
Why don't you use that Heloc to borrow when you spend to much on your cards and can't pay them off?
Banned
Mar 11, 2016
2081 posts
867 upvotes
Banks don't "negotiate" rates on cards..they will only offer to switch you to a lower rate card if you qualify and if they have such a product available...easy process to call and ask or look on their website....on an existing card...rate will not be reduced
Deal Fanatic
Nov 22, 2015
5781 posts
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ROYinTO wrote: I've read it in a number of places - call up and ask for a lower rate. It can't be that simple, or is it? I've searched this forum and can't find a discussion on it.

So how does it really work?
Are some banks and CC companies more willing to do this?
If so who? What has your experience been?

Is there a better time to do it?
For example, when your utilization is below a certain percentage? When you have a pre-approval from another provider?

Please share your knowledge and experience.
Never heard of a bank that negotiates CC rates. As other posters have mentioned, there are cards available with lower interest rates.

What's the point of paying off your mortgage in 5 years, if you're paying through the nose in credit card interest? Swallow your pride, refinance your mortgage to include all your credit cards, and save thousands in interest. Your bank may even be able to do a blended rate refi, to avoid paying a prepayment penalty.
[OP]
Deal Addict
Dec 12, 2009
4693 posts
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Toronto
hyacinthe wrote: Why don't you use that Heloc to borrow when you spend to much on your cards and can't pay them off?
I am not sure I understand what you are saying. I didn't say we can't pay off the cards, I'm just looking for ways to reduce the interest rates.
[OP]
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Dec 12, 2009
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Fjr2005 wrote: Banks don't "negotiate" rates on cards..they will only offer to switch you to a lower rate card if you qualify and if they have such a product available...easy process to call and ask or look on their website....on an existing card...rate will not be reduced
Sensible advice.

Asking for a rate reduction is something I heard a number of times on Gail Vaz-Oxlade's show "til debt do us part", not to mention reading it here on RFD.
Member
Oct 16, 2014
221 posts
137 upvotes
Moncton, NB
ROYinTO wrote: I am not sure I understand what you are saying. I didn't say we can't pay off the cards, I'm just looking for ways to reduce the interest rates.
Well if you're paying off the cards each month in total, you shoudn't be worried about interest as it doesn't apply to your paid off balance. The HELOC will have the lowest interest of all so that's what you need to borrow from if needed extra cash.
[OP]
Deal Addict
Dec 12, 2009
4693 posts
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Toronto
hyacinthe wrote: Well if you're paying off the cards each month in total, you shoudn't be worried about interest as it doesn't apply to your paid off balance. The HELOC will have the lowest interest of all so that's what you need to borrow from if needed extra cash.
Actually, I should be worried about high rates. If I can get better rates, it will be less expensive should I need to use available credit in the future.

I appreciate all of your comments but none of them have directly addressed the initial question of renegotiating credit card rates. Granted you did indicate lower rates are available in different cards and financial institutions.
Deal Fanatic
Aug 29, 2006
7726 posts
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Here is a good article on the topic - http://canadianfinanceblog.com/reduce-y ... rest-rate/

I understand your concern however since one time I was "volunteered" to switch from paper to e-statement and missed a paying a few and I'm sure similar things many happen and people end up getting interest on balance when they didn't mean to.

Haven't tried to call in on the interest rate yet but I did talk to RBC about the mistake on missed payments and I was able to get a good chunk of interest back in credit by just - asking.

So I strongly suggest that OP should follow the advice in the above link then call and ask.
The Devil made me buy it - RFD. :twisted:
Member
Jan 31, 2007
300 posts
25 upvotes
Montréal, QC
ROYinTO wrote: Asking for a rate reduction is something I heard a number of times on Gail Vaz-Oxlade's show "til debt do us part", not to mention reading it here on RFD.
I think that only works if you're already carrying a balance on the cards anx they see that you're having problems paying the minimums each month. Which is the case for most people on that show.

Credit cards won't just reduce your interest rates of they see that you have no problems paying the minimum every mknth. Even less if you never carry a balance.
Deal Fanatic
Nov 22, 2015
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ROYinTO wrote: Actually, I should be worried about high rates. If I can get better rates, it will be less expensive should I need to use available credit in the future.

I appreciate all of your comments but none of them have directly addressed the initial question of renegotiating credit card rates. Granted you did indicate lower rates are available in different cards and financial institutions.
Why would it be less expensive in the future? You shouldn't pay any interest on credit cards, period.

You plan to be unemployed and living off your credit cards? That's what a HELOC is for.

Your initial question was answered many times over. There is simply no room for negotiation of credit card rates with any financial institution. I'm not sure where you read about this being possible but it's not.
[OP]
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Dec 12, 2009
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Toronto
hdom wrote: Here is a good article on the topic - http://canadianfinanceblog.com/reduce-y ... rest-rate/
Thanks, that is what I was looking for.
superfresh89 wrote: You shouldn't pay any interest on credit cards, period.
Perhaps in a perfect world. Much easier if you have a regular paycheque. It can be difficult if you are self employed and the bulk of 3+ months of earnings may show up all at once. Q1 is always challenging where the bulk of my annual mandatory business expenses are due.
Member
Nov 19, 2011
292 posts
66 upvotes
Calgary
I would consider a line of credit and just use that to pay off the credit cards. You keep the benefit of credit card rewards but pay a lower jnterest rate :)
Deal Guru
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Mar 23, 2008
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Edmonton
ROYinTO wrote: Thanks, that is what I was looking for.



Perhaps in a perfect world. Much easier if you have a regular paycheque. It can be difficult if you are self employed and the bulk of 3+ months of earnings may show up all at once. Q1 is always challenging where the bulk of my annual mandatory business expenses are due.
IMHO... Use your HELOC and savings for spanning dry spells, not your credit cards. Continue paying off your credit cards the same as normal.

C
[OP]
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Dec 12, 2009
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Toronto
CNeufeld wrote: Use your HELOC and savings for spanning dry spells, not your credit cards. Continue paying off your credit cards the same as normal.
A common theme that I should have acknowledged earlier, thanks to all that have suggested doing so.
Deal Guru
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Jan 9, 2011
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Vancouver
superfresh89 wrote: Your initial question was answered many times over. There is simply no room for negotiation of credit card rates with any financial institution. I'm not sure where you read about this being possible but it's not.
The OP may have seen one of these:

http://www.cbc.ca/news/skeptics-surpris ... e-1.748016
http://www.cbc.ca/marketplace/blog/your ... rest-rates
Deal Fanatic
Aug 29, 2006
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^Exactly, this is RFD and people come to this thread and tell OP either it can't be done or don't do it ?? WTH.

Even if you don't ever plan on carrying a balance, people should do it and get it lowered for just in case.
The Devil made me buy it - RFD. :twisted:

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