How to Get a Break From Credit Card Payments Now
A recent report from LendingTree says now is the right time to ask your credit card lender to lower your interest rate, waive late payment fees, or waive the annual fee, noting that the success rate for such requests is over 80%. All you have to do is pick up your phone and ask, and knowing what to say helps too. Here are some tips to keep in mind when calling.
It never hurts to try
The truth is, for most borrowers, interruptions in payment of late fees and interest rates are not all that difficult if you’re reporting temporary economic hardships, and even easier to demand during disasters like a pandemic. The problem is that only 53% of cardholders approached the card issuer for a hiatus in the past year, despite these success rates for various types of requests:
- Reduced annual interest rate: 83%
- Late Fee Waiver: 88%
- Increased credit limit: 83%
- Canceled / Reduced Annual Fee: 92%
These numbers are based on a February to March timeframe, so it may have changed somewhat in terms of what card issuers will approve now , but given the success rate has been consistently high since the start of the pandemic, it definitely doesn’t hurt to ask.
How to ask for a discount
Before you call, make sure you have a clear idea of your current income and expenses. You will want to imagine yourself as a borrower who is responsible but struggling to pay off the debt at the current interest rate. Also, try to find a similar credit card from another lender with a lower interest rate, as you will want to use it with leverage if necessary.
While there are several types of credit card interruptions that you can request, you probably want to start by requesting a lower interest rate as this will have the largest impact on how much money you spend on interest overall (successful According to the report, interest rates on requests decreased by 10% on average). For each type of request, LendingTree offers the following tips based on what worked for cardholders in their report:
Reduced annual interest rate
Take [another credit card] offer and use it as part of the conversation: “I’ve been a good customer of yours for a long time and I love my card. However, the APR is 25% and I was just offered one with an APR of 19%. Can you match it up? »As our survey data shows, they are more likely to want to work with you, at least to some extent.
Late payment canceled
Just pick up the phone and be polite. If you are a longtime customer with a good reputation and this is your first offense, the odds are in your favor. In fact, some card issuers will even waive the first late payment fee as per the policy. However, if you’ve been late a few times in the recent past, your chances are probably not so good. Even so, it never hurts to ask.
Higher credit limit
Start with a number based on your current limit. The average increase reported in our survey was around $ 1,500, but your situation will be different. If your current limit is $ 500, a $ 1,500 raise might be too much. However, if your current limit is $ 5,000, this request might be fine.
Canceled / reduced annual fee
Before calling, think about what you will accept. If you are asking for a fee to be dropped entirely and they only suggest lowering it, is that enough? What if they offer you extra bonus points or miles, or make another counter offer instead of a reduced commission? And perhaps most importantly, what if they say no? As with many negotiations, you have more leverage if you’re willing to leave, so this might be an option. However, you should not threaten this threat if you are not ready to follow through, and you should not follow through if you have not thought about what it will mean for your reputation.