How to Save Money on Your Credit Cards With One Phone Call

credit cards on credit card statement

Credit cards and a statement | Source: iStock

Everybody likes a good deal, especially when it doesn’t take too much effort to get it. As far as saving money goes, there’s never been a better time to shave money off your credit card bill than now, when the companies are fighting tooth and nail for your business. Even though most Americans are hesitant to switch their primary cards, the sign-up bonuses offered right now are just one perk of the credit companies competing for business.

According to a recent study by CreditCards.com, that’s not the only perk consumers can take advantage of right now. In addition, cardholders can ask for a reduction in interest rates (APR) on their cards, and request waivers on paying late fees if they miss a payment. In both cases, customers are more likely to be granted those requests than ever before.

In a survey of 981 credit card holders in the United States, CreditCards.com found that 89% of people who asked for a late fee to be reversed were granted the request. In addition, about 78% of people who asked for a lower interest rate on their credit cards were given a reduction.

But despite the high success rate, only about 1 in 5 people actually made the requests, the survey found. “I think really what it’s mostly about is people don’t realize that they can do these things and that they’ll be successful when they do. People have a lot more power when it comes to dealing with the credit card issuers than they think they do,” said Matt Schulz, senior industry analyst for CreditCards.com.

How to ask for a better rate

If you pick up the phone to call your credit card issuer to ask for a reduction in your APR base rate or to request a late fee waiver, chances are you’re going to get it if you go about it in the right ways, Schulz said in an interview with The Cheat Sheet. “This is really all about competition,” he said. “A lot of it’s just about customer service and doing what they can within reason to keep consumers from switching.”

young man smiling and talking on a smartphone

Man on a smartphone | Source: iStock

Of course, people who pay their credit card bills on time and those who don’t carry a balance will have little need to request a waiver or ask for a lower interest rate – they won’t need favorable terms for either since they won’t incur extra costs in the first place. But with credit card competition steep right now, even people with lackluster payment histories should receive better rates – all they have to do is call and ask for them. The success rates of asking for lower fees and rates is proof of that, Schulz said. “It indicates that even folks with less than perfect credit rate are getting their way as well,” he explained.

If you’re looking to decrease your interest rate but aren’t sure how to start that conversation with your card issuer, Schulz provided a few tips that will give you the best chance of success.

1. Be courteous

They say nice guys finish last, but those guys probably weren’t negotiating their credit card APR at the time. “I think the first thing you need to do is be nice,” Schulz said. “You don’t want to go in there and be pushy or be a jerk because you’re less likely to get what you want that way.”

2. Know your end goal

It’s a good idea to have some idea of the rate you’d like to end up with before you make the call – and better yet, have an idea of what’s reasonable based on your credit history. You could guess based on what your friends tell you or by doing some research on your own, but the best way is to see what other offers you qualify for, either through sites like CreditCards.com or from the offers you receive in the mail.

Take advantage of that junk mail before tossing it. If you have a card with a 20% base rate now and you receive an offer from a competing company for 15%, for example, Schulz suggests calling your current provider to see if they can match that rate. If the spokesman you can’t talk with first can’t do anything about your rate, ask (politely) to speak with their manager. Normally, that person will have at least a little wiggle room to work with, Schulz said.

3. Mention other relevant account history information

If you’ve been a lifelong card holder with your current company, make sure to mention that to the representative you speak with. Card loyalty can sometimes deliver more perks than you might think, both in terms of lower rates and late fee forgiveness. In terms of late fees specifically, mention if you’ve never had a late fee before. This will show up in your records, and most companies forgive rare lapses without asking too many questions. Discover’s company policy is to provide a waiver for the first late payment, for example, and one Chase representative said they forgive late payments once every six months. (If it’s more frequent than that, however, you’ll be out of luck.)

“With something like a late payment fee, the negotiation will be a little simpler than with an APR decrease, but it’s still about being prepared, being direct, but being pleasant,” Schulz said.

All of these negotiations will be on a case by case basis, but it’s safe to say that it’s worth a shot. The worst case scenario is you keep the rate you’ve had all along.

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