Credit card legislation that goes into effect next summer will put a crimp in the ways banks can earn a profit. Your credit card company may be looking for ways to increase their profits before the new limits cut their options. One of the easiest and fastest ways is by increasing the fees.
One of your options to avoid higher fees is to transfer your balance to a lower APR card. But with transaction fees up to 5% of the transferred amount, the initial cost of the transfer may make the transfer futile. The concept of bargaining with your local auto dealer is easily to understand, what many people may not know is that they can negotiate with card companies. So before you go searching for a better deal, perhaps you should consider negotiating for lower rates.
If you must resort to a balance transfer, speak to the potential card issuer for a lower transfer fee. You may be approved for a lower credit card rate because of the vast amount of competition, especially for consumers with excellent credit.
But, before you make contact, do your homework by researching the company. Always comparison shop and read the fine print; be prepared to tell of the offers you’ve found. Be pleasant but don’t show too much enthusiasm. Open your conversation by saying, �•I’d love to take advantage of the balance transfer offer, but the fee is just too much. I’m requesting that you waive the whole fee.”
Your chances for approval will be higher when you mention your many years of loyalty to the company and your record of on-time payments. If you use a large amount of credit, remind them of how much business you were worth in the previous year – the company gets a percentage of every one of your purchases. If your request for a fee-waiver is denied, ask that the fee be capped at something you think is reasonable — say $50, or even $100, which is a lot better than 3% of a large balance.
When you get a great credit card offer, it may be worth taking a moment to call the company to see if there is anything else they can do, quite often there is. This is especially true with new customers, who are given special perks, like the introductory low APR deals or no-fee balance transfers. Become an informed negotiator by understanding current terms and comparison shop. For example, you may be offered a credit card with a 2.9% APR and an uncapped transfer fee but another at 3.9% APR may be available with a cap of $75.
If you’re transferring a large sum of money or expecting to carry the balance for a while, knowing your options opens up opportunities to use credit more to your advantage. Understanding the variables and fine print really matters. Watch for grace periods and late-fee policies before you move your debt to a new company, and carefully calculate if you really will be saving and how many months it will take you to pay it off. Those who pay attention to the details and are willing to fight over them will come out ahead.