4 Ways You Can Pay Less for Your Credit Card

credit card cost

Do you ever feel hopeless in the face of your credit card company?

From swift and expensive credit card fees to interest rates that can knock you over, it’s no surprise if you do. However, as a cardholder you actually have more influence than you think.

Here are four ways to reduce your credit card cost – just by asking.

4 ways to reduce your credit card cost

1. Reverse late fees

My husband is smart and responsible. But, man, can he forget to pay a credit card bill. Until he finally set up automatic payments, I would overhear far too many calls with him asking to reverse a late fee.

The funny part? It worked – most of the time.

Credit card companies know that late payments happen. The good news is as long as you’re not 30 days late, you might be able to get the credit card fees reversed. Call your issuer, explain that it was a mistake, and get that fee reversed.

Then sign up for automatic payments so you never have to worry about it again.

2. Get annual fees removed

You might think it’s impossible to get your annual credit card fee removed. After all, why would a credit card company do this? Well, they do it because they want to keep your business.

As long as your annual fee isn’t on a super premium credit card, your issuer may not have an issue with waiving it for the year.

In fact, a lot of new credit cards waive annual fees if you hit a certain spending requirement. Keep in mind, that doesn’t mean you have to carry a balance. Pay it off before interest hits and you won’t go into debt just to avoid a fee.

If the credit card issuer won’t remove your annual fee, consider switching to a no-fee credit card instead.

3. Lower your interest rate

Did you know you can ask your credit card issuer to lower your interest rate?

According to credit card expert Jason Steele, “Credit card issuers spend a tremendous amount to acquire and retain customers, and they don’t want to see them go.”

Use that to your advantage. I tried this once and was able to get my interest rate of 24 percent down to 11 percent. Not a bad outcome for a 45-minute phone call.

4. Switch to a balance transfer credit card

If your credit card issuer won’t lower your interest rate and you’re carrying a balance on that card, think about opening a balance transfer credit card. These cards come with a promotional interest rate that could last anywhere from six months up to two years.

This is a great tool for paying off debt, too. That’s because less you pay on interest, the more money you have going to your balance. What’s more, you’ll pay off debt even faster if you pay more than your minimum due.

If you still have debt when the promotional expiration date nears, consider getting another balance transfer credit card before it hits. Then you can avoid a retroactive charge on your balance at the new, higher rate.

Follow these negotiation tactics when making your case

Just because you can call your credit card issuer doesn’t mean you’ll get what you want. Follow these negotiation tactics to help the conversation go smoothly.

1. Be polite

You know the old saying, “You get more bees with honey”? Well, keep that in mind when you keep hearing the word “no” from your credit card company’s customer service representative.

Be polite. Appeal to their human side by acting like a friendly human yourself. Make them want to help you by treating them well over the phone.

You know how frustrated you get when a phone call lasts forever? Remember that the person on the other end of the line has to wrangle these calls all day long. Being nice can go a long way.

2. Never give a sob story

Some people think giving a sob story will get them results, but that’s rarely the case. Again, do you know how many of these stories they hear all day?

Don’t try to get them to sympathize with you. Instead, treat your request to cut your credit card cost down like you would negotiating a raise. Would you get a raise by telling your boss why you need the money? Or would you get it by showing your boss the results you’ve delivered?

3. Remind them of your history with them

A long, positive credit history is the best negotiation tool for the cardholder. Remind your credit card issuers how long you’ve been with them. Tell them why you’ve been a stellar customer.

Remember, credit card companies work hard to keep good customers happy. So don’t leave this powerful negotiation tool on the table.

4. Calmly explain that you’re thinking of canceling your card

Finally, show them you’re serious by calmly, politely stating that you’re thinking of canceling your credit card.

“Tell them you are considering canceling your card so that you can be transferred to the retentions department,” Steele explains. “This is where representatives have the most authority to waive your fee or offer you additional rewards in order to retain your business.”

That’s right, not only might you get your fees waived, you might even get some additional rewards.

5. Ask to speak to a supervisor

If you get a no, ask to speak to a supervisor. This is one that’s worked well for me in the past.

Usually, the first person you talk to (and maybe even the one after that) is not qualified to give you what you’re asking for.

But that can change as you move up the chain. So don’t take the first “no” for an answer.

Remember, they’re still offering you a service

It can be intimidating to call your credit card issuer, especially if you’re in credit card debt. At that point, credit cards almost seemed designed to keep you in a holding pattern.

However, don’t forget that credit card companies are a service and that you are an empowered consumer willing to take your business elsewhere.

If you’re afraid you don’t have a good enough credit score to be considered a valuable cardholder, follow these steps to improve your credit score. A year from now, you may be in a much better position to negotiate.

At the end of the day, this is your life and your money. Don’t accept whatever comes your way – fight for the outcome you really want.

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1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.29% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.29% APR assumes current 1-month LIBOR rate of 1.34% plus 4.20% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2017, the one-month LIBOR rate is 1.23%. Variable interest rates range from 6.02% – 15.97% (6.02% – 15.97% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms and presence of a co-applicant. Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
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  3. Automatic Payment Benefit: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
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