When you hear the phrase “negotiate with your bank”, debt problems may be the first thing that comes to mind. Many people use negotiation strategies to get lower interest rates and speed up their debt repayment. But not all negotiations need to surround the subject of debt. Even if you are on task with all your creditor payments, negotiation can actually be a tool that saves you a lot of money.
Is Negotiating Worth It?
Many consumers maintain the same accounts year after year with the same financial services firms. Companies are constantly changing to remain competitive. They offer new promotions and better deals all the time. Many of these deals are not available to existing customers simply because existing customers never ask for them. If you’ve been using the same firm for a while there is probably a new customer offer out there, either at the same company or a competitor, that can save you money.
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How to Negotiate Effectively
If you plan to negotiate a better deal you have to be prepared so you’ll know how far you can go and what is at stake. There is no guarantee your creditor, service company, or bank will agree to accommodate your request simply because you ask. Having research and data to back up your request will increase the odds of things turning out in your favor. Here are some tips to help you follow through with successful negotiations.
Research What You’re Missing
It is not good enough to just want something new, you have to know what you want. Using your credit card company as an example, you’ll want to research what other credit card providers are offering new customers to lure them into the company. List specific company names and their offers so you’ll have evidence when you plead your case. If you know that ABC Credit Card Company is offering customers incentives you are interested in, your credit card provider will know you have done your homework. Know what you want before you make the call.
Check Your History
Before making contact with a company with a list of demands, make sure you know where you stand as a customer. Creditors and banks are likely to give in to requests of long-standing, on-time paying customers. If you have a history of late or missed payments, you are not going to catch much of a break. A loyal customer with a great credit history is more apt to be rewarded than someone who cares little about their financial standing with the firm.
Make the Call
When you get on the phone, anticipate the need to ask for a supervisor. Go through the motions with the first representative you speak to, but many of the customer service agents manning the phones are not authorized to give you a better deal. After the first attempt go straight to the supervisor. You’ll save yourself from having to repeat your request over and over. Once the supervisor gets on the phone, be very polite and let them know you’ve been doing your research. Be specific about what competitor companies are offering and let them know you’d like a similar deal.
One technique for getting your point across to creditors when negotiating a better deal is to casually mention you were thinking about taking your business elsewhere. Let the company know you wanted to give them the opportunity to consider your request before exploring your other options. Unfortunately many consumers will choose to go straight in for the kill and threaten to leave the company. Most of the time this method has no positive outcome for the customer as many firms will stonewall at this point if you come off as irrational. The more polite you remain while expressing your point, the more agreeable the company will likely be.
Once a new deal has been struck, request that the company send written correspondence to you to confirm the negotiation and the new terms. Without proof of the communication, you will have nothing to fall back on if the company fails to follow through. Help remind yourself about the phone call by making your own detailed notes including when you called, who you spoke with, and what agreement was reached. Mark the date on your calendar the call occurred and also notate the date two weeks into the future when you should make a follow up call if no correspondence has been received. If you don’t follow up, you can not rely on your creditor or bank to do it for you.
In the event the company does not see fit to grant the request you made, make sure you are ready to stop doing business immediately. Once you suggest you are going to go elsewhere, you must be able to commit to that stance if they won’t budge. If negotiations fail, you should be ready to say “Okay, what do I have to do to close my account with you right now?” Some companies will wait to the very last hour to agree to a new deal because they know that customers will often be afraid to follow up on their promise to take business elsewhere. If you decide it is best to go somewhere else, write down the protocol for effectively closing out your account and do what is necessary to get established elsewhere.