You Know That Annual Fee On Your Credit Card...Well, It's Negotiable!

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Mar 29, 2017
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Activity, Research, Credit Cards, Current Events, Audio Resource

From WSJ (subscription):

More than 80% of people who ask their card company for relief from their annual fees receive it, according to a new survey. Most get the fee waived entirely, while a smaller portion receive a fee reduction, according to a CreditCards.com report released Monday that surveyed around 950 card users.

Why are card companies so flexible? Well, it’s a competitive marketplace out there:

Intense competition between credit-card issuers is the main reason for this flexibility on fees. Nearly every large bank is vying for more market share in the credit-card market. To this end, card issuers have been paying out more in rewards in recent years in an effort to boost card usage and revenues. One of the biggest appeals for lenders is the double-digit interest rates that many borrowers pay on card balances.

It’s not just the annual fee either:

Other terms are also flexible. Some 87% of card users who asked their lender to waive their late fee were successful, according to the CreditCards.com survey. And nearly 70% who asked for a lower interest rate got it. Consumers seem to have a better shot at getting issuers to agree to these requests if they have a history of paying on time.

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Why is this important to know? It opens students’ eyes to the fact that many things in life are negotiable. They need to learn to advocate for themselves and develop strategies on how to get the best deal. In a hyper-competitive marketplace, they might just succeed.

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About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.