One good thing to come out of a tough economy: You realize that virtually everything you pay for is negotiable, even your credit card rate.
Pre-recession, you might have been inclined to just live with a 30-percent interest rate and $60 annual fee on the credit card you used most. But tough financial times mean increased competition among credit issuers, and more competition means more opportunity for enterprising individuals to get the best credit card deal.
Just as you shop around for the best deal on a car, clothing, gas and groceries, you can track down the best deal on your credit card, too. When comparing card offers, keep these questions in mind:
What is the annual fee?
Creditcards.com says just one in four credit cards charges an annual fee, and the median cost is $50. In some cases, you may be willing to pay the annual fee if other aspects of the offer are particularly attractive.
Look for a card that has no fee, or ask the card issuer if they are willing to waive it often, they will.
What is the interest rate?
Everyone knows the interest rate is how credit card companies make their money. Ideally, you want as low a rate as possible and your good credit score should help secure that for you in theory. In reality, a credit card issuer is going to charge you as high an interest rate as youre willing to accept.
Dont hesitate to call the issuer and negotiate your credit card rate. If they refuse, you always have the option of going elsewhere.
What conditions might trigger a change in rate?
There are two kinds of credit card interest rates: fixed and variable. Variable rates fluctuate with the prime rate. Fixed rates dont move with the prime, but could change if you violate any aspect of your credit card holder agreement. For example, you may have a card with a rate of 3.99 percent locked in until the balance is paid, but if you make a late payment, the issuer may have the right to bump that rate well into the double digits.
Find out what the issuers terms and conditions are for changing your rate. Sometimes those conditions may make the deal less desirable.
Are there any hidden fees or conditions?
Be sure you understand what all those conditions and fees are before you open an account, and once youre using the card, monitor your statement every month to make sure no unexpected fees slip in.
Hows their reputation for customer service?
Boil it down and one credit card offer is much like any other. But customer service can be a huge differentiator. If you have a problem, how long will you have to wait on hold and how many layers of automation will you have to go through before you can reach a human being? Will that person be willing and able to help you? Will he or she treat you courteously?