How to negotiate lower credit card fees and rates.

Auriemma Consulting Group completed a study that showed many consumers are having success in negotiating lower credit card fees and rates. The percentage of people who directly negotiate with credit card companies now stands at over 20%. There are millions of consumers benefiting from lower late fees and other charges on their accounts.

The study shows that between 18 and 23 percent of cardholders have tried to negotiate some of the terms of their credit card plan, and many are having some form of success. With tens of millions of people struggling with paying their bills, more and more people are paying different types of charges on their cards, such as penalties, monthly costs and late fees. As these various expenses add up, these charges are causing more people to negotiate and ask for help.

The study learned that the most commonly negotiated terms are trying to waive or reduce annual fees. The second most common request is consumers trying to negotiate permanent interest rate reductions, but this one can be more difficult to obtain. More people are also contesting credit card late fees and other charges.

The percentage of individuals who are asking for help with their credit lines rose from 14 percent to about 25. Also, more people are asking for relief with late fees, as that is often the most expensive “extra” cost placed on borrowers. The number of those negotiating over late fees has increased to about 10 percent. Here are ways how to get relief and lower fees.

Introductory and so called teaser rates are often negotiable

Many credit card issuers and banks, such as Bank of America and Discover card, offer low interest rate introductory offers. When that low teaser rate expires, it is strongly recommended for the customer to make a quick phone call to the credit cards customer service department and ask to have it extended, or not reset at all. Most banks will look at the customer's account and history and decide what to do with the consumer. In many cases, the teaser rate will increase, but not to the standard interest rate.

The study indicates that a quick response time from the issuer may indicate whether they accept your request or not. After all, after the low interest rate expires, the chances are that the consumer won't wait around that long, which forces the issuer to decide and respond quickly.





Customer service can negotiate

Many credit card issuers and banks, such as HSBC and JP Morgan Chase, have provided their customer service teams the ability to directly negotiate credit card bills, fee, and rates. For many of these issuers the customer service representative who is on the other end of the 1800 call has some discretion and power to negotiate. Or they will offer another solution, and find more on credit card assistance programs.

Sometimes they can negotiate to conclusion, but sometimes they need to involve their supervisors. While this adds another step to the process, it should not discourage the customer. The supervisor may be called in to close the deal. Credit card rate and fees renegotiating rarely need more than a supervisor.

As expected, the level of response and flexibility will vary from card issuer to issuer. You will find that some customer service representatives for some banks are provided enough power to make and negotiate credit card terms on their own, in a rapid fashion. They will use information they have on file about the individual and also the data that needs to be provided by the customer asking for aid. Some issuers, such as Bank of America, make the renegotiation of credit card debt and bills as simple as a yes or no. But other companies will never do this.

How credit card issuers negotiate

While few banks and lenders are willing to give details on their process, or even confirm that they negotiate, some have provided details. One bank has stated that they review and examine a number of different scenarios, including the borrowers spending habits, finances, and over history when the customer calls. For example, whether the customer has been profitable to the bank or has been part of a good account with the lender is key. Some things they examine before negotiating fees or rates include :

  • Do they have a balance on their account?
  • Do they have a high volume of transactions?
  • Is the credit card account a revolving account?





They are trying to decide if they can lower a customer's interest rate or fees without taking on additional risk. They conduct these reviews on a case by case-by-case basis for those that request it. If banks do lower rates, increase credit lines, or negotiate fees, the bank needs to ensure they are still profitable. After all, they are in business to make money.

If the individual is in serious trouble and may file for bankruptcy, they really should seek the advice of Consumer Credit Counseling Service, or some other professional such as a debt settlement company. It is recommended the person not attempt to negotiate themselves.

Annual credit card fees can usually be negotiated

Considering that most credit card companies still do not charge annual fees, this can be an advantage to the consumer. It would be unusual for a credit card issuer not to waive an annual fee if the borrower pressed for it as they are afraid the person will cancel their account.

So, negotiate the fact that competitors do not charge a fee, and you may switch card companies. You have argument in your corner. The study showed that you can usually talk them out of annual fees and the penalty rate.

A good history and habits will help your cause

If you did not follow the rules, it will be harder to get the bank to provide you relief and negotiate with you. While people do negotiate their credit card interest rates, fees, and limits themselves, it is still not that easy. If you have missed making a couple of payments on your card in the past, without a solid reason, then you may be considered higher risk. In these cases if you try to negotiate lower fees or new rates, then waiving the fees could be very difficult if not impossible.

Consumer Credit Counseling Service (CCCS) has indicated that for an interest rate or penalty to be changed or have a credit card fee waived, banks today are more willing to work with consumers than even just a few months ago. But this is only for select customers.




In addition to negotiating your credit card penalties and other fees, many creditors are now offering consumers hardship programs in which a credit card issuer will reduce the payment and interest rate for a period of time, usually six months. This will help the consumer get caught up on paying their debt. However, once that window is done, the interest rate and fees you need to pay will rise again.

Even today, many people are not aware that they can negotiate, that hardship programs exist, and that they can get help. However, the knowledge is getting out there, and people need to use these assistance programs to help them with debt.


By Jon McNamara

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