You may have more sway with your credit issuer than you realize, says Matt Schulz, a credit card industry analyst at CompareCards.com.
Because of the competitive nature of the credit card industry, Schulz says, cardholders, especially those with higher credit scores, could use their leverage to save money by negotiating interest rates, late fees, and annual fees. You can also often negotiate a higher credit limit, he adds.
More than 8 in 10 cardholders who asked for a lower interest rate from their credit issuer in the past year were successful, according to an April 2019 CompareCards.com survey.
"People can be really surprised at how often someone can pick up the phone and ask [for] something from their credit card issuer, and the issuer will say yes," Schulz told Grow earlier this year. If your credit score is in the 700s and above, "you're in a pretty good place" to negotiate, he says. However, you may have some difficulty negotiating if your credit score is in the 600 range or lower.
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Here are four questions you could ask your credit card company, Schulz says, that could save you money and/or end up helping you raise your credit score.
If you forget to make a payment, getting a late fee waived can be as easy as picking up the phone and asking for one from your credit issuer, says Schulz. Nearly 90% of cardholders in the past year were able to negotiate waiving a late fee, which can save you $30-$40, according to the CompareCard.com survey.
However, Schulz says, if you're late three or more times, you may not be as successful.
If you're looking to boost your credit score, you can ask your credit issuer for a higher credit limit to improve your debt-to-credit ratio, says Schulz. Nearly 80% of cardholders surveyed were able to negotiate a higher credit limit. The average increase was about $1,500.
If you do negotiate a higher limit, though, Schulz says, be careful: Don't get carried away and start overspending. You still need to pay off your bill in full and on time every month to maintain or raise your credit score. Improving your credit score, or keeping it high, can save you money down the line when you apply for a mortgage, student loan, or auto loan.
Negotiating an annual fee has a lower success rate than other requests, according to the survey, but still, 67% of people who asked in the past year were able to negotiate having an annual fee removed, and another 24% were successful in getting the fee reduced.
"It's not always as simple with annual fees as a yes or no. It can be a partial reduction, it can be a conditional reduction, it can look a few different ways," says Schulz. In general, you're more likely to have luck with small annual fees, or those under $90, than bigger fees, or those over $400, he says.
The best way to negotiate a lower annual percentage rate (APR) "is to come with ammunition in the form of other offers that you've seen" like a competitor's lower APR offer, says Schulz. Being honest about why you're asking for something can be a helpful negotiation tactic, he adds.
Over 80% of those who asked for a reduced APR in the past year were successful in reducing their interest rate, and the average APR reduction was about six percentage points, according to the CompareCard.com survey.
"What you can do is say, 'I've been a good customer, pay my bills on time, I like the card but my interest rate is 22% and I was offered a different card at 17%. Will you work with me?'" says Schulz. "A lot of people get intimidated or nervous by the idea of negotiating with a credit card issuer, so if you have other offers that can help you guide the conversation, that can make [it] a lot easier."
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