Buzz
A recent LendingTree study reveals that now is a prime moment to ask your credit card issuer to reduce your interest rate, cancel a late fee, or eliminate an annual fee, with over 80% of these requests being successful. All you need to do is make a call—and knowing the right approach will help. Here are a few key points to keep in mind when making that call.
It never hurts to give it a shot
The reality is, for many borrowers, securing breaks on late fees and interest rates isn’t too difficult if you can show temporary financial hardship, and it becomes even simpler during events like the pandemic. However, only 53% of cardholders have asked their card issuer for assistance in the past year, despite high success rates for these types of requests:
Reduced APR: 83%
Late fee waived: 88%
Increased credit limit: 83%
Annual fee waived/reduced: 92%
These statistics reflect data from a February to March period, so there may have been some fluctuations in what credit card issuers are currently willing to approve. However, given the consistently high success rate since the onset of the pandemic, it’s still a good idea to inquire.
Steps to request a discount
Before you make the call, ensure that you have a clear understanding of your income and expenditures. You should present yourself as a responsible borrower who’s struggling with paying off debt under the current interest rates. Additionally, consider finding a comparable credit card from another lender offering a lower rate, as this can serve as leverage if necessary.
Though there are several credit card concessions you can request, it’s likely best to start with a request for a reduced interest rate, as this can have the most significant impact on the overall amount of interest you pay. Successful requests have typically resulted in an average 10% reduction in interest rates, according to the findings in the report. For each request type, LendingTree provides the following tips based on what has worked for other cardholders in their study:
Reduced APR
Consider using an offer from [another credit card] as leverage during the conversation: “I’ve been a loyal customer for years, and I really like my card. However, the APR on my account is currently 25%, and I’ve received an offer for a 19% APR. Could you possibly match that?” According to our survey data, credit card companies are likely to work with you, at least to some extent.
Late fee waiver
All it takes is a simple phone call and a polite approach. If you've been a customer for a long time, have good credit, and this is your first late payment, you're in a favorable position. In fact, some issuers may even waive your first late fee as part of their policy. However, if you've been late several times recently, your chances may be lower, but it's always worth asking.
Increased credit limit
Begin with a target number based on your existing credit limit. Our survey found that the average increase was around $1,500, though this may vary for you. If your current limit is $500, asking for a $1,500 increase could be excessive. However, if you have a $5,000 limit, such a request may be more reasonable.
Reduction or Waiver of Annual Fee
Before making the call, consider what you're willing to accept. If you ask to have the fee waived entirely but they only offer a reduction, will that be satisfactory? What if they propose additional rewards points, miles, or another alternative instead of a reduced fee? And perhaps most importantly, what if they decline your request? In many negotiations, you hold more power if you're ready to walk away, but only do this if you're truly prepared to follow through. Don't make threats you're not willing to act on, and be sure to weigh how it might affect your credit.
