New data from CreditCards.com says that 84% of cardholders who asked for a late fee waiver were able to get those fees eliminated, and 70% were able to get an annual card fee lifted.
The data reinforces the notion that getting out of credit card fees isn’t as difficult a task as cardholders may think.
According to CreditCards.com, the likelihood of being approved for a fee waiver, a higher credit limit or a lower interest rate is fairly equal among different demographic groups (although it certainly rises in higher education households). In fact, the success rate was a healthy 87% for those with no more than a high school education and 84% among cardholders with an annual household income under $40,000, the company reports.
“The most common reason people haven’t asked for lower credit card fees is ‘I didn’t know I could ask this,’ followed by ‘I didn’t think I’d be successful’,” says Matt Schulz, a senior industry analyst at CreditCards.com. “Of course, you can’t pay late every month and expect to avoid fees every time, but once in a while you can absolutely get out of a fee just by asking nicely.”
Getting a break on credit card fees doesn’t appear to be a luxury to cardholders. These days, they see it as a necessity.
“Consumers are starting to get sick and tired of making payments to credit cards,” says Kalen Omo, owner of Kalen Omo Financial Coaching, in Tucson, Ariz. “They are starting to see how much money the banks and lending institutions are making on their products and they are saying, “I’ve had it!”
So, what are the best ways to curb those credit card charges and fees?
Job one is to recognize exactly what fees and charges credit card companies charge – and may be hiding from cardholders in the card contract’s fine print.
These are the most pervasive credit card fees charged to customers, according to the American Bankers Association:
- Typical Credit Card Fees
- Annual fees
- Late fees
- Returned payment fees
- Cash advance fees (using ATM or convenience check)
- Balance transfer fees
- Foreign transaction fees
- Expedited card replacement fees
The biggest target for credit cardholders, however, is interest rates, which are the most onerous charges of all for cardholders.
“A lower interest rate could help you pay down your debt faster,” says Michael Sullivan, a personal finance consultant with Take Charge America, a national non-profit credit counseling firm. “You can call your credit card company and ask for a lower rate if you have a positive credit history.”
Be prepared to state your case, Sullivan says. “Maybe you’ve been a loyal customer, or possibly a competitive creditor is offering lower rates?” he asks. Those are issues worth bringing up to card companies, he says.
Also, get ahead of credit card fees before they hit your account. For example, if you anticipate making a late payment, and incurring a late payment fee, pick up the phone and call your card provider. “They may offer fee alternatives,” the ABA states.
Credit card maintenance fees are another charge that can be waved, with a little effort.
“Getting rid of your maintenance fees is one of the first fees to cut,” says Dawn-Marie Joseph, founder of Estate Planning & Preservation in Williamston, Mi. “This could simply mean getting rid of paper statements and moving to online statements.”
An annual fee is another fee where you need to weigh the pros and cons, Joseph says.
“If you have an annual fee are you using your rewards points?” she asks. “If you are using them, do they outweigh the annual fee? This fee might be one that you can swallow. Just ask yourself this question – are you getting more cash back than the fee you are paying?”
There’s a reason 56% of credit card customers who asked for a fee or a rate decrease get what they wanted. The key is stepping up to plate and, as Schultz says, “asking nicely.”
If you can manage that, the path to lower credit card fees and charges is more wide open than you may think.