Are you a good bank customer?
What makes a good bank customer? Well, it depends who you ask.
A bank considers a good bank customer as someone who has all of their accounts with them for an extended period of time, has stable employment, a good credit rating and of course, pays their bills on time.
Customers, on the other hand, might consider themselves to be a good customer by paying their credit card, mortgages and other balances on time. They may also think that they should be rewarded for being a good customer.
So if you've been a good bank customer, how can you leverage your good standing?
Forget applying online or via the telephone. Go to your bank branch, make an appointment and sit down with a personal banking officer. That human interaction allows you and the banking officer to discuss your goals. The banking officer also has some leeway when it comes to offering a better rate. For example, when I was renewing my mortgage rate, I went into my bank and sat down with a banking officer. He acknowledged that I was a long-time and good customer and offered me a very good rate -- one that wasn't advertised.
One of the better ways to leverage that good rating? Find and stay with a great banking officer. Develop a relationship with them. As your relationship progresses and both of you become familiar with your financial situation and goals, you will be able to access better rates.
Don't accept the first offer from your bank. Consider it the opening gambit in a negotiation. Bank officers have leeway to offer a better deal, whether it's for a mortgage, line of credit, credit card rates or mortgages. This is where you bring up your good standing with the bank. If you don't get the answer you want, (understanding that rates can only go so low), speak to someone else or go to a supervisor.
Arm yourself with the latest rates, but also but your own information. Look up your credit history and understand it. Compile the last six months of debt statements (all paid on time, of course) and have on hand the latest rate offerings from your bank's competitors before you talk to your bank. By doing the research, you will be able to smartly negotiate what you want.
Be prepared to walk away if your bank won't offer a better rate. If you know that a competitor is offering a rate that your bank won't match (assuming the terms are the same), don't be afraid to move your finances to another banking institution. Most banks will fight to keep their customers because it's cheaper than winning new customers.
There are plenty of ways to benefit from establishing a good standing with your bank, it's just a matter of leveraging it. After all, a half a percentage point in a mortgage or credit card rate can save (or cost) you thousands of dollars in the long term.
Renee Sylvestre-Williams is a freelance writer in Toronto.