Credit Card Negotiation
01 February, 2018
Borrowing scores, rates, debt to limit… Many credit card holders hate digging into computational details, they simply desire to get their APR, borrowing limit, and use a borrowed amount for their needs.
But what if they knew that they could expand their borrowing limit or plunge APR by simply calling a bank.
It sounds like a dream but it really works (but not in all cases).
How Do Banks Make Their Decisions?
For bank lending to any client stays both a risk and a source of profits.
Same principle applies for credit cards. Issuers of most credit products from effectify.com/credit-cards/ don’t agree lending their money to everyone; they want to ensure that you have a chance of returning your money back at a specified date.
The secret remains that they don’t make their decisions for each client separately, they use formulas formed on their credit score (as a measure of default risk) and personal data.
Anyway, aside from this hard part, there remains a soft part, based on their trust to the client. And this is a part which you stay capable of changing. CNBC reveals that 70% of all calls aiming at decreasing APR and even higher share of calls for lowering yearly payment have reached success.
The reason is not that bankers are delighted to speak with their clients but they stay open for clients who desire to endorse good relationships with their bank. So, when you aim for better conditions, for them it carries a risk that unsatisfied client can move to another institution, which offers better conditions. That is why they meet halfway and accept your proposal.
The 3 Secrets of Efficient Negotiation
The fact that consumers can change their borrowing conditions doesn’t tell that they can call for change anytime.
Bankers spend millions hiring intelligent people, so you should not appear to them as someone searching for lucrative openings at the cost of bankers.
Here is an approach of how one can do that:
1. Don’t call too constantly: Phone call stays not a guaranteed highway for lower APR. The initial time you will get a reduction, in another situation they will dismiss you. The more frequently you ask, the higher is the chance for rejection;
2. Stay polite and ask about recent services and suggestions: When you request the help of a bank, try also to help workers you talk to. It stays their job of propagating info on the latest services so if you request that, you will make them more loyal to you;
3. Remain a responsible borrower. The third secret is capable of refining your conditions in two pathways: by developing your credit score and by enhancing bank’s loyalty to your standing. If you stamp up your bills completely every month and don’t delay with your payments, banks are more prone to give you some precedences.
But if you use your credit not responsibly, don’t be knocked out by low APR.