How to get your lender to extend a 0% offer
| Author: Clariman | Created: 10/01/2008 |
As many lenders have introduced uncapped balance transfer fees, the borrower's existing 0% cards become more precious: particularly those that have no BT fees. Of course, the 0% introductory periods on our existing cards will come to an end at some point, but many savvy rate-tarts have managed to get their 0% deals extended. Not only does this enable you to further exploit a good introductory rate, but it means one less credit card application and one less credit check. Read our guide to ensure that you maximise your chances of getting an extension.
There are 4 key things to remember
- Businesses don't like losing customers. Use that to your advantage.
- Preparation is all-important. Plan your tactics.
- Timing is crucial. Call at the wrong time and you lose out
- Be a good negotiator on the phone. Follow our guidelines below.
Businesses Don't Like Losing Customers
It costs a business up to 10 times more to acquire a new customer than to retain an existing one, so customer retention programmes are vital if a business is to remain profitable. This is particularly true of financial services and credit card users can use this to their advantage.
Rule 1: Pay off the credit card balance in full before the 0% period ends.
It is critical that you put yourself in a position where you can close your card and move on. The only way to do this is to pay off the balance in full before the introductory period ends. If you do not do so, then the lender knows that you are about to pay interest, so they have you over a barrel and you have demolished your own negotiating position.
Rule 2: Be mentally prepared to close the card down.
To retain a strong negotiating position you have to be mentally prepared to close the card and end your relationship with the card company company, so prepare yourself for that. On the other hand, you also need to be ready to give the rep just enough information to demonstrate that the right deal could persuade you to stay.
Timing is crucial
If you call at the wrong time you could miss the opportunity to get your deal extended so follow these rules.
Rule 3: Do not call before your existing deal has expired
Having paid off your card balance, allow the expiry date of the introductory offer to pass. If you call during the offer period, the lender knows that you could do a transfer on the existing deal so will not be willing to extend it. I suspect that some computer systems or company policies don't allow them to extend a deal that is still running, so wait until it has ended. The precise timing is up to you, but ringing the day after it ends may suggest that you are pretty desperate for credit. Don't be in a rush. Even better, if they ring you before you ring them, because that indicates that they are keen to retain your custom! If you can spare the time, leave it a few weeks.
Rule 4 Make your call during normal office hours
Although many lenders operate 24x7 customer service centres, you need to make your call during normal office hours. Although a general customer services representative may have some authority to offer you a deal, the real specialists are in the Customer Retentions (or 'Customer Loyalty') department. These are the people whose job it is to keep you as a customer and they typically work office hours rather than 24x7. If you get into negotiation with a customer services rep, they will try to handle the call themselves, but may put you through to retentions. If you call out of hours, the rep has no one to escalate your call to, so will probably just close your card. If customers services say they are going to put you through to "card closures" don't be alarmed, because that is usually another term for the customer retention department.
Preparation is all-important
Doing some preparation in advance of your call can pay big dividends. You need to be in a position to know what kind of deals may be on offer and which ones would be worth your while.
Rule 5 Understand whether you have a chance of an extension
One of the things often said about buying, selling and negotiating is that "if you don't ask, you don't get". This is true, but knowing whether is it worth putting in the effort in the first place can save a lot of wasted time. So before you do all the preparation listed below, find out whether your lender has a track record of refusing or offering 0% extensions. Post a question on our credit card forum to get feedback from others.
Rule 6 Research the lender's current offers and your current Ts & Cs
Be aware of what deals the lender currently has for new customers. This will give you an indication of what the best deal could be. Can you see a card that you would be happy to 'upgrade' to if they offered it? You should also know what your existing Ts & Cs are e.g. if you have free BTs or capped BT fees. You can use this to your advantage on the call (see below).
Rule 7 Research the best deals in the market
Take a look at out our Balance Transfer cards table to see what the best deals are from other lenders. You can use this in your negotiations.
Rule 8 Know what deal would be acceptable to you and when you would walk away
Now that you can see what your current deal is and what other things might be available, do some calculations to see what sort of deals would be worth having e.g. if they offered a capped fee of £100 for 12 months at 1.9% with a credit limit of £10K, would it be worth it? Or are you going to hold out for a straight 0% deal? Are you prepared to pay a BT fee and if so, how much. If you know your negotiating position in advance, you are in a much stronger position.
Rule 9 Know what BT you will do if they offer you a deal
Before you make the call, ensure that you are well placed to act on any 0% offer that is made. This means you need to know what BT you will do if they offer you a good BT deal.
Being a good negotiator - making that call
Having paid off your balance, done your preparation and timed the call, now is the time to put it all in to action! At this point you should know what deal you want, what deal you would accept and to be absolutely prepared to walk away if you don't get it.
Rule 10 Handle the call with firmness, subtlety and listen!
During the call, you need to make it clear that you are prepared to close the card, yet you want to give them a hook that suggests you might be persuaded to keep the card if they offer the right deal. I tend to be quite firm yet tentative at the same time, saying something like "Thankfully, I've managed to pay off the balance on my ABC card so I don't really need it anymore. I think I'd like to close it". Depending on their response and how the call feels to me, I might add - as if an afterthought - "but if you had any special offers ... you know ... that might be useful".
At some point in the conversation you want them to ask "do you have any debt on other credit cards still?", to which the answer is a reticent "well, yes I do actually". They may then make you a Balance Transfer offer - which probably will not be that great (e.g. 4.9% LOB with a fee) so I would say, "well thanks, but I'll just leave it". At this point (if not already) you may get put through to customer retentions who will hopefully make you a better offer - or the customer services rep may make a better offer themselves.
If they say that they don't have any offers and that other lenders no longer offer fee free 0% deals, then say that you know that XYZ card company is doing 6 months at 0% and you are confident of getting one of their cards, but you are happy with the customer service from ABC so would rather just stay with them if they could match that offer.
If they don't offer a deal, don't be afraid to ask directly for what you want.
If the customer services rep does not offer anything, then ask if they have a customer retentions department that you could speak to.
Once they offer you a 0% deal, ask if there is a BT fee. If they offer you something worse than your existing Ts & Cs, say in a disappointed voice "oh ... I didn't get charged a fee last time" at which point they will hopefully check out your old Ts & Cs and offer you a fee free or capped deal.
If at the end of all this you do not get offered the deal you want, you then have two choices: (a) close the card or (b) let some time pass and call back to see if they have any offers. I do not have a strong recommendation on what to do at this point, but my personal view is that the customer retention department has done its job if you hang up without having closed your card i.e. they still have you as a customer and they have offered you nothing in return. If you do decide to wait a few weeks and call back again, don't keep putting off closure indefinitely. At some point you need to make a decision to move on.
Summary
None of this is guaranteed to work for every lender, but it will maximise your chances and remember the following:
- They don't want to lose your customer
- Timing
- Preparation
- Negotiate well on the call
Talk about this article or anything else in our lively free forums.