Waiving Credit Card Interest Saves the Average American $88 a Month

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The novel coronavirus pandemic has a lot of people worried about their finances. And while there are resources available for people who need help, thousands of Americans are just short on cash.

In an effort to help them, many credit card issuers are offering to waive interest and account fees. But how helpful is that, really?

We ran the numbers to find out.

Key findings

  • Assuming the average credit card balance (about $6,200) and interest rate (around 17%), Americans would save $88 by not paying interest for one month.
  • Waiving a 2% minimum payment would add $124 to the average savings, for a total of $212.
  • Even if credit card companies waive a month's interest payments for millions of people, they'll take a negligible hit to their bottom lines.
  • Some groups -- such as cardholders in their 50s or those with credit scores from 670–739 -- stand to save more.

Americans need credit card help

A recent survey by Freedom Debt Relief found that

  • 36% of respondents plan to carry a credit card balance to pay for groceries because of the coronavirus pandemic,
  • 21% plan to carry a balance to pay utilities (water, electricity, and gas),
  • 18% plan to carry a balance to pay for television and/or internet, and
  • 16% plan to carry a balance to pay for both mobile phones and health care.

Fortunately, card issuers are giving customers a break.

Most aren't offering coronavirus credit card relief by default, but they may let customers skip a payment or two without incurring interest. Cardholders just need to call, apply online for help, or, if they have an Apple Card, text customer service.

Most credit card companies are asking their customers to contact them so they can offer personalized help on a case-by-case basis. Later in this article, we'll offer some tips on what consumers should say during those conversations.

The average credit card interest rate

For consumers carrying a balance from month to month, the average interest rate is currently 16.61%, according to Federal Reserve data.

That means consumers pay roughly $170 per year for every $1,000 of credit card debt.

But it's not uncommon to have a higher interest rate. Many Americans with less-than-ideal credit pay interest rates of 22.99%, 26.99%, or even 29.99%. That translates to about $230, $270, or $300 in interest per year for every $1,000 owed.

By comparison, consumers with excellent credit and an introductory offer could be paying 0% APR for 14 months. That's a huge difference.

But even without stellar credit, many cardholders have another option: asking their card issuers to waive interest because of COVID-19.

How much will the average American save with credit card payment assistance?

Experian's most recent report on U.S. consumer credit card debt puts the average American's credit card debt at $6,194.

This is the average balance of all consumers with a credit card, not just consumers who carry a balance from month to month. But many people are probably halting credit card payments because of the economic difficulties stemming from COVID-19 -- even if they don't carry a balance.

We'll round that average balance up to $6,200 and use the average credit card interest rate of 17%. That's a monthly interest rate of 1.42%. Multiply that by $6,200 and we get $88.04.

That's how much interest the average American consumer could save if their credit card company helped them out by waiving interest for a month.

It's not a huge savings, is it? Now you can see why credit card issuers are willing to be so generous. It's great for the companies' image and doesn't cost them much.

The cost to credit card issuers

Let's take a look at one of the smaller issuers: Goldman Sachs. It has issued an estimated 3.1 million Apple Cards, and they offered to let cardholders skip their March and April payments without incurring interest charges.

If Goldman forgave one month's interest for every cardholder (assuming the averages above), that would cost the company $273 million. That's a pittance for a company whose net earnings were $8.47 billion in 2019.

Besides being great for the company's image, it keeps customers happy and might make them more loyal (read: carry more debt and pay more interest) in the long term.

Any help is appreciated

That said, consumers are in a tough spot right now. $88 might not sound like much to some people, but to others, it represents an important lifeline.

And if a card issuer also waives a minimum payment for the month -- say, a 2% minimum on the average balance of $6,200 -- that could add another $124 to the savings. Put those together and you have $212. It's not a hugely impressive number, but it's enough to make a difference to a lot of people.

How much could consumers save if interest were waived for one month?

Card issuers may or may not offer the same interest payment relief that Goldman Sachs offers. But let's say they will. What does that actually mean for American credit card holders?

It depends on their balance and interest rate. Also, the average American's credit card debt is spread across four credit cards. So getting the savings listed below may require consumers to negotiate with more than one credit card company.

Here's some data on typical balances and savings for different groups based on age, credit score, and location.

Someone in their 50s carrying the average balance could save almost $200 if they're paying a high interest rate. That's definitely worth negotiating over.

But really, any of these amounts are worth the trouble of a few minutes on the phone or sending an email.

It's interesting that people with good credit tend to have the highest credit card balances. But the average cardholder in any credit score range could save a lot of money by having their interest waived for one month.

What do these top 10 cities have in common? Money.

Cardholders in these affluent communities aren't necessarily carrying balances from month to month, but they're sure charging a lot to their cards.

In good times, saving $300 may not be a significant savings to the wealthy, but the pandemic is affecting everyone. Negotiating a break from credit card interest could buy a week's worth of groceries (or more).

How to ask a credit card company for help

What should consumers say when they call their credit card issuers?

First, they may not need to call. Call volumes and wait times are crazy right now. Instead, they may be able to log into their credit card accounts and find the issuer's "contact us" or "email us" page. If they fill out the online form with a polite and clear request, that may be enough.

Whether consumers decide to write or call, here are some negotiation tips inspired by Ramit Sethi, bestselling author of the personal finance book I Will Teach You to Be Rich.

Sample credit card negotiation script

Customer: Hi, I've lost my job/been furloughed/had high medical bills due to the coronavirus pandemic, and I'm calling/writing to request that my minimum payment and interest be waived this month. I've been a customer for X years, and I'd appreciate your help to keep my account in good standing. I'm applying for unemployment/expecting a stimulus check, and I expect to be able to make my payment next month.

Credit card customer service: I'm sorry, we can't waive your interest, and you will still be required to make your minimum payment.

Customer: I'm sorry, but that won't work for me. I need you to waive my minimum payment and my interest this month. Otherwise, I'll be looking to do a balance transfer to another credit card with a lower APR.

(Or: Well, I see that other credit card companies are offering this benefit to their cardholders who have difficult circumstances, as I do. Are you sure you can't extend this offer to me? I've been a customer for X years, and I'd like to stay with .)

Credit card customer service: Well, I just checked my computer again, and I see that we do have a coronavirus assistance program that we can offer you. We'll be waiving your minimum monthly payment this month, and your account won't accrue any interest this month. You'll see this change reflected on your next monthly statement and in your online account within the next hour.

Customer: Thank you very much. I really appreciate your help.

Sometimes it's this easy. However, if their first attempt fails, consumers can start the process over with a different customer service agent. They might call instead of email, email instead of call, or try online chat.

If the bank isn't offering to waive interest, customers could try asking for a lower interest rate, a waived late fee, a better card from the same company, or whatever would save them the most money.

Also, if consumers get help this month and still need help next month, they should call again. Credit card companies can offer assistance more than once -- and many people are facing challenging times over more than a month.

Consumers have multiple options

Americans can also apply for a 0% intro APR balance transfer credit card if they're having trouble making payments. Most require good to excellent credit, but some are more flexible with requirements.


  1. Apple (2020). "About the COVID-19 Customer Assistance Program for Apple Card."
  2. Federal Reserve (2020). "Consumer Credit - G.19 Current Release."
  3. Goldman Sachs Group (2019). Annual Report 2019.
  4. Micheletti, Michael (2020). Freedom Debt Relief. "COVID-19 Pandemic Strikes at Americans’ Financial Health."
  5. Shevlin, Ron (2020). Forbes. "If Tim Cook Won’t Tell the World How Apple Card Is Doing, I Will."
  6. Tatham, Matt (2019). Experian. "A Look at U.S. Consumer Credit Card Debt."
  7. Tatham, Matt (2019). Experian. "U.S. Cities with the Most Credit Card Debt."

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