Learning to negotiate

Do you know the four magic words for getting a better deal?

Learning to negotiate

A few weeks ago, we asked you, SavvyMoney readers, when you last negotiated your credit card interest rate. A total of 27 percent of you said within the last six months to a year — not terrible, but far from a majority. In fact, the majority of you (55 percent, to be exact) said, “I know you can do that, but I'm not much of a negotiator.”

Now, I know that if you don't make a habit out of haggling, it can be intimidating. Many of us like to avoid confrontation, and even more of us hate hearing the word no. Negotiating can involve both of those things. However, there are certain things you can do to make a negotiation go your way:

  1. Do your research! Whether you're buying a TV or a used car, or asking to lower your cable bill or cell phone bill, information is your friend. In the case of lowering your bills, your best bet is to find out what the competition is doing. If a new cable company is in town and is offering a low rate, call up your own company and see if there's anything they can do to match that.
  2. Focus on your strengths. In the case of asking your credit card company to lower the interest rate, this means pointing out your excellent credit, your history of on-time payments and your loyalty to the company. A SavvyMoney member operating under the name “willbdebtfree” did just that, and got wonderful results. Check out her story:

    “I decided to call Citibank to request to have my APR lowered. At first I thought it was a waste of time. I was surprised to hear them say that they would be glad to lower it from 28.74% to 8.24%. He said that I had excellent credit with them because I have been paying my account on time. Not only did he lower my interest rate, he also gave me credit for one month. Now I am about to call my other creditors to do the same.”
    Congrats on a job well done, willbdebtfree. With success stories like that, I think you will be debt free!

  3. Finally, repeat these four magic words: “Can you do better?” These four words are the key to any negotiation. It's a way of suggesting that you think the person on the other side — be it a boss, a retailer, or a credit card company — has some wiggle room. Finding that wiggle room is the key to getting a lower price (or interest rate).

So, SavvyMoney members, I have a challenge for you: if you're a part of the 55% who told us that you've never tried to lower your credit card interest rate, I want you to try now. After all, if you never ask, the answer will always be no!

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