I get alot of emails from people who can no longer make their minimum monthly payments on credit cards due to interest rates that have risen as much as 10% from the original rate they were paying. We live in a culture where we don't bargain for most things (cars and houses are the exceptions). When I travel to other places in the world, I'm always surprised to find that outside of the U.S., the price of everything in the marketplace seems to be open to negotiation. In this country, people tend to think that bargaining is pathologically tacky, unless a lawyer or agent is doing it for us.
From personal experience, I know that the interest rate on my credit cards can go up astronomically within a very short period time if I forget to pay them on time for a couple of months. I finally got smart, and now I pay most of my bills online and get my reminder notices by email. Even though I've been on the straight and narrow for a long time now, I found that my interest rates weren't going down in recognition of my good payment behavior. In the spirit of the cobbler's children who have no shoes, I had fallen victim to inertia about my own financial concerns. So, I recently called one of my credit card companies and negotiated an 8% reduction in my interest rate, reminding the customer service department that I'd been a damned good customer, especially after I got my act together and started paying online.
Now, I'm going to apply my bargaining techniques everywhere (well, maybe not at the grocery store - that might be a little tacky).
Posted by HK at July 13, 2004 06:40 PMThis is an excellent point. When we were going through the phase where interest rates on home loans were falling rapidly, I contacted my then mortgage company to find out if they would be willing to lower my interest rate to the going rate at the time. They had every reason to do it - I had an outstanding payment history with them, they'd already paid commission to my broker and numerous other fees, it would have cost them little if anything to match the rate at the time and keep a customer. Instead, they said they weren't set up to do that. I immediately refinanced with another lender. This is the second time I've gone through this with a lender with the same results. I don't understand it at all.
As for credit cards, yes, it's very common to be able to negotiate a lower rate, especially if you use your card frequently and threaten to close the account if the rate's not reduced. Most cc companies very much want to keep their customers.
I'll be curious to hear how your bargaining techniques go at other places. My brother is very good at bartering (he owns a custom furniture company) and when my father had a beverage company he actually bartered beer for many things. There are certainly more forms of currency than cash.
Posted by: Sheri at July 29, 2004 10:52 AM