In Banking It is All Negotiable

What Can you do for Me?

Got a call yesterday from a friend asking me about what interest rate that I paid on my unsecured line of credit. Normally I don’t discuss this kind of info with anyone other than my wife and my banker, but this is a good friend so I went to my online banking site and quoted the rate I was paying.

I had mentioned to this friend previously the rate, so we were just checking, and then he asked how much I paid on my secured line of credit (remember the unsecured line is what the bank will loan me just on the basis of my income and good looks, the secured line is effectively a lien on my house), and I had forgotten that it was the same rate I paid on my unsecured line of credit.

A bit of history will clarify this, back when I switched banks to Canada Trust from BMO (remember my OBG post Don’t be Afraid to Change Banks) the CT rep at the time set up an unsecured line of credit for me, and as an enticement to move to CT, he made it Prime + 1/4% (remember that is the Bank Prime not the Bank of Canada Key Index). I have used that Unsecured LOC off and on over time, but haven’t really used it too much lately. Every time I have gone to my TD branch, the rep sees this and asks me, “How did you get that rate? No one gets that rate….”. I point out that someone gets that rate, because I have it, and I laugh.

Since then TD has upped the rate for both my Unsecured and Secured to be Prime + 1/2%, and I went and complained, but to no avail, but I still have a secured and unsecured L.O.C. with the same rate (until someone from TD sees this, I suppose).

Getting back to the real story, this friend wondered how he might get that same kind of good deal, because his current credit vehicles were charging much more, and his bank was claiming no one got the rate that he remembered I got (guess his bank is wrong since I get it right now). He is going to try to get a better rate via various negotiating tactics (and keeping the I will take my business elsewhere trump card in reserve, because he is a very good client for any bank).

It is All Negotiable

This conversation reminded me that from my observations of the Banking Industry in Canada, everything is negotiable (and in fact I had an excellent comment on yesterday’s post about Cost of Cheques pointing out that I should have asked for free cheques at the local branch).

As with most consumer services Banking relies on having good clients that make the bank money, and they can fight for you if they want to. The statement by any bank employee to any request for a special service that we don’t do that is simply them saying either (i) I don’t know how to do that or (ii) I don’t think you are a good enough customer to warrant that service (in most cases). Remember this needs to be a reasonable request like:

  • Free banking (i.e. no service charges) for an extended period of time.
  • Lower mortgage rates or credit vehicle rates.
  • Lower rates for safety deposit boxes, or cheques.
  • etc., etc., etc.,

Keep this in mind: All fees are negotiable as long as the bank thinks you are a valued customer, and you are willing to spend the time negotiating for these services.

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