If I were to tell you that there's a trick that gets credit card customers a lower interest rate more than half of the time or reduces or eliminates their annual fee 70% of the time, would you be interested? According to a new report, not only does such a trick exist, but it's remarkably easy to use.
Want lower fees? A higher credit limit?
What if there was an easy way to get your credit card company to waive your annual fee or to lower your interest rate? There is -- just ask for it!
Many people don't even know this is an option. However, a new CreditCards.com report says that not only is it an option, but your chances of success are quite high.
- 70% of credit card customers were successful in getting an annual fee lowered or eliminated.
- 85% received a higher credit limit just for asking.
- 84% got their card issuer to waive a late fee.
- 56% got a lower interest rate or APR.
In all, 60% of respondents have made at least one of these requests. Of this group, 89% were successful in getting a positive outcome.
However, many Americans don't even know that it's possible to get these things just for asking. Forty percent haven't made any of these requests at all, and some are rarer than others. For example, only 18% of cardholders say they've asked for an annual fee waiver. The most common reasons for not asking? "I didn't know I could ask this," or "I didn't think I'd be successful."
You might be surprised at the difference it could make
If you're successful with any of these requests, it could save you lots of money and even help boost your credit score. Lower interest rates can be an especially big help, and it's important not to underestimate the power of a seemingly small reduction.
According to CreditCards.com senior industry analyst Matt Schulz:
If you have $5000 in card debt on a card with a 20% APR and you pay $100 on that card, it'll take you 109 months and $5840 in interest to pay the balance off. Drop that APR by just 1 percentage point and keep the balance and monthly payment the same and it'll take you just 100 months and $4985 in interest to pay it off. That's 9 months faster and more than $800 cheaper. That's a big deal.
If you need more motivation to call your credit card issuers, you can use CreditCards.com payoff calculator tool to see how much a lower interest could potentially save you.
Additionally, waiving a one-time late fee could save you as much as $27. "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," Schulz says.
Finally, while a higher credit limit won't directly save you money, it's one of my favorite tricks that can boost your credit score. Specifically, your credit utilization is a big factor in your FICO score, and a higher limit with the same balance means that you're using less of your available credit, percentagewise.
For example, if you have a $2,000 credit card balance with an $8,000 limit, you're using 25% of your available credit. On the other hand, if that limit rises to $10,000, your utilization immediately drops to 20% and could positively impact your credit score.
It would be silly not to try
The bottom line is that, with such a high rate of success, it doesn't make sense not to try asking your credit card issuer for some of these things. This is especially true if you have a higher-than-average interest rate, a big annual fee, or are actively trying to add a few points to your credit score. After all, the worst thing that can happen is that they'll say no.