Credit card fees you can (and can't) negotiate with your issuer

Matt About Money with Matt Schulz

Matt Schulz has done thousands of interviews about money in his time as Senior Industry Analyst at CreditCards.com. He's been in The Wall Street Journal, New York Times and USA Today. He has appeared on Good Morning America, CBS Evening News, Fox Business Network and CNBC as well as hundreds of local TV and radio affiliates throughout the nation. Over the years of doing these interviews, he's seen many questions pop up over and over again - questions that impact nearly all Americans.

In this space, Matt will address these questions to help Americans get a better feel for how to find the right credit card, get it and use it the right way every day because he believes – and is living proof – that the right credit card can change your life.

What terms can you negotiate with your card issuer? And how?

Having a credit card is expensive enough. If you’re willing to make a call and ask a bank for a break, you have a far greater chance of having your wish granted than you’d believe. Card terms you may negotiate successfully with your card issuer include:
  1. Late payment fees.
  2. Annual fees.
  3. Some interest rates.
  4. Penalty rates.
Expert Q&A

Check out all the answers from our credit card experts.

There are few questions I get asked more often than this one, and the answer is simple:

Not everything to do with your credit card is negotiable, but everything is worth asking about.

It’s just like my dad always says, “Never be afraid to ask. The worst thing that could happen is they say ‘no.’ But if they say ‘yes,’ amazing things can happen.”

It’s great advice that far too few of us heed. So, why don’t we make that call?

We fear failure and rejection, but we don’t realize our odds of success are often really high.

We tell ourselves we don’t know what to say, when often we don’t need to say much more than “please” and “thank you.”

We say we don’t have time to pick up the phone, even though we find time to check Facebook and Instagram 10 times a day.

A phone call to your credit card issuer can save you real money

Let’s make a vow to stop watching cat videos and ranting about politics and instead focus on saving ourselves some real money with a phone call or two. I’ve done many of these things myself, and there’s no reason you can’t be as successful with them as I have been.

Here are a few things you can negotiate, and some that may not be worth your effort:

Credit card terms you can negotiate

1. Late payment fees

As long as you don’t make a habit out of asking for it too often, this one is almost a slam dunk. According to a 2017 CreditCards.com survey, nearly 90 percent of those who asked for a late payment fee waiver succeeded.

  • What to do: First, make sure that you make that payment before you call. You may also want to set up autopay, just to be safe. Then, call your issuer, tell your issuer you’ve taken steps to make sure it won’t happen again, and then ask politely to have the late fee waived. Chances are that it will be.
  • Likelihood of success: Very high.

2. Annual fees

This could go a few different ways. If you ask for your annual fee to be waived, the issuer could offer a partial reduction, a one-year waiver or even a permanent removal. Your issuer might also offer extra points or miles instead of reducing or waiving the fee. Our survey showed that more than 80 percent of those who asked got a waiver or a reduction.

  • What to do: Be polite but be firm – and don’t be afraid to threaten that you’ll close the card if the fee isn’t waived. (Don’t worry about the impact of a potential closure on your credit. There’s no sense in keeping a card you won’t use anymore if it has an annual fee.) 
  • You can also consider downgrading your card to a no-annual-fee version. The card will likely come with fewer bells and whistles, but it can be a way to eliminate your annual fee without having to close your account.
  • Likelihood of success: High, at least for getting a reduction.

3. Some interest rates

This may be the most important of them all. If you have credit card debt, nothing is more important than slowing how fast that interest grows.

A few points on an APR can mean hundreds of dollars or more over the lifetime of a card, and the best news of all is that nearly 70 percent of those who asked for a lower interest rate got it.

  • What to do: Again, don’t be afraid to walk away. That’s your real trump card in this hypercompetitive credit card marketplace. Come into the negotiations armed with the best credit card offers that you’ve seen at CreditCards.com or in your snail mail and say, “I like your card. I’ve been a good customer for years, but my interest rate is 20 percent and I was just offered a card with a 15 percent rate. Can you match it?” Assuming you really have been a good customer, your issuer likely will make you some sort of offer. From there, it’s up to you whether you take the deal or walk away.
  • Likelihood of success: Surprisingly high, especially if you’re willing to walk away.

4. Penalty rates

If you have a penalty rate on your credit card – which can run up to 30 percent or higher – chances are you’ve made a big mistake. These rates most often apply when someone is 60 days or more late with a payment. Since it is a penalty, you’re likely stuck with it for some time.

However, if you make six consecutive on-time payments following the imposing of that penalty rate, the Credit CARD Act of 2009 requires your card issuer to review your account to see if your old rate (or something close to it) should be restored.

  • What to do: Make those payments on time, every time. Nothing else you do will matter if you can’t do that. Once you’ve made those payments, get in touch with your card issuer to ask when your account will be reviewed. There’s no guarantee that the review will lead to a reduction, but if you handle your business, your chances are pretty good.
  • Likelihood of success: For at least six months, probably zero. Once you get your financial feet back under you and start consistently making payments again, things improve dramatically.
Tip

Tip: Do your homework before asking your credit card issuer to waive late fees or penalty rates. Make sure you make your payments on time and set up autopay to avoid further late payments in the future. Showing your card issuer that you’re doing your part to be a good customer will increase your chances of getting better terms on your card.

Other card fees banks may be less willing to negotiate

This is just a partial list, obviously. Balance transfer fees, foreign transaction fees and cash advance fees are examples of fees for which banks may be less willing to budge.

However, credit limits are often negotiable – about 90 percent of those who asked were granted an increase – and even sign-up bonuses can be up for discussion.

Credit card issuers often target specific customers with more lucrative offers than would be available to the general public. Our CardMatch tool, for example, often includes exclusive offers for select customers.

If you hear of one of these offers, take note of it and don’t be afraid to call that issuer and ask if you can receive it. Again, it can’t hurt to ask.

That’s the key thing to remember: You have more power than you realize when it comes to your credit card. Don’t be afraid to wield that power. It won’t always work, but when it does, as your parents would say, amazing things can happen.

See related: Script to ask for a lower credit card rate, New credit card has so-so terms? You have choices


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Updated: 11-16-2018