A common perception exists that credit cards inevitably come with fees. However, while fees are undesirable, they can often be avoided with proactive strategies. Applying preventative measures is key to minimizing these costs.
While prevention is definitely the best course of action when it comes to card fees, even the most responsible cardholder with a high credit score is likely to encounter a fee at some point. Despite being an expert and having used cards responsibly for roughly 37 years, I have personally been dinged with several card fees over the years.
The bad news is that fees can add up quickly, particularly penalty or punitive fees like late payment fees. The good news is that, despite all the legalese on your card disclosure statement, you can often negotiate card fees.
Should you find yourself with an unexpected fee, don’t be overly concerned. I provide several straightforward methods for requesting a reversal, requiring minimal effort. These strategies are often successful in resolving the matter.
Can you negotiate your credit card fees?
Yes, you can reverse credit card fees and save money by using simple, effective techniques. However, it’s worth noting that some cardholders experience a greater success rate than others.
Fees came under scrutiny in 2009 thanks to the Credit Card Accountability Responsibility and Disclosure Act (CARD Act of 2009). Over-the-limit fees were virtually eliminated unless you opt-in to allow a purchase to go over your credit limit. Also, caps were placed on late fees and other card costs were eliminated, such as fees for making online payments or inactivity fees.
While I acknowledge the value of regulatory measures, I firmly believe consumer empowerment can also be an effective safeguard against fees. Over the years, I have personally secured refunds or eliminations for hundreds of dollars in various fees, including annual and balance transfer charges.
Beverly Harzog, credit expert and podcast host of “Your Personal Economy,” says that while your success does depend on the type of fee, “in many cases, consumers can negotiate.” She continues on to say “You’re more likely to succeed if you have a great credit score. If you do, the lender knows you’re a responsible cardholder and may be more likely to agree to remove the fee.”
Also, on a related note, it can help if you’ve been a responsible cardholder. According to card expert Jason Steele, customers in good standing will likely see fees reversed fairly quickly upon request as long as they normally make on-time payments and don’t misuse their card.
BONUS TIP!
It costs card issues to acquire new customers. Because of this, card issuers generally want to keep their current customers in good standing and as happy as possible, and are therefore generally open to waiving or reversing fees. In short, according to Dr. Mary Ann Campbell, certified financial planner and “edu-tainer,” “it’s usually less expensive for them to keep a good customer than to find a new one.”
Which credit card fees are negotiable?
If you are charged a credit card fee and seek a refund, it’s natural to wonder which fees are eligible for a fee waiver. In short, most fees are negotiable or waivable.
There are numerous fees beyond just the few mentioned above. These include fees that many consumers may already be aware of such as foreign transaction fees, balance transfer fees, interchange or surcharge fees and cash advance fees. In addition, there are fees that aren’t as well-known including expedited payment fees, card replacement fees and paper statement fees.
➤ SEE MORE:Common credit card fees and how to avoid them
While most fees can be disputed and/or refunded, there are three types of fees that are more difficult to avoid:
- Harzog cautions that annual fees usually can’t be completely avoided. However, she says that you might be able to get an annual fee waived for the first year, which is a common selling point of some travel reward cards. It is my preference to avoid annual fees, and I have achieved this goal by utilizing no-annual-fee cash-back credit cards.
- Harzog also points out that cards that target consumers with bad or no credit, which are called often called subprime cards, may not be willing to waive fees. This is due to the issuer having increased risks of delinquency or default. Some of these cards even have monthly management or maintenance fees that are designed to help decrease the issuer’s risk.
- Lastly, interchange or merchant card fees are typically firm as they are set by card networks (think Discover, American Express, Visa and MasterCard), banks, and payment processors.
BONUS TIP!
I’ve learned that even small fees can be quite impactful over time. I recently found a $1.99 monthly paper statement fee on my Lowe’s card, which would have amounted to approximately $24 a year. After noticing this, I contacted the issuer, transitioned to electronic statements, and requested a reversal of the single $1.99 fee, which was granted. A small effort that will now save me roughly $24 each year.
How to get a credit card late fee waived
Late fees for many consumers are generally the most costly type of fee. The Consumer Financial Protection Bureau reports that late fees represented more than 10% of the $130 billion issuers charged consumers in interest and fees in 2022.
The good news is that late fees are fairly easy to negotiate. Moreover, several popular cards, such as the card_name, don’t even charge ANY late fees, and others, such as the card_name, don’t charge a late fee the first time you pay late. Citi is a CardRatings advertiser.
Campbell explains that “Late fees on credit cards can be like getting a speeding ticket…not paying attention and letting judgment slide. Other times, circumstances and hardships beyond our control cause us to incur a late fee, which can be costly.”
Three personal finance experts offer the following advice on how best to dispute a credit card late fee:
- Campbell opines that “most managers will forgive a late fee if you’ve been on time for the past year. However, you can’t become a ‘serial late payer’ and expect regular fee waivers.” She adds that you should “respect the organization you owe, and most will show respect for you.”
- Steele adds that if you missed a payment and are trying to get a late fee reversed, it can help to make the payment first, and as quickly as possible (before you call your issuer requesting a refund).
- Harzog believes honesty is the best policy. “If you accidentally made a late payment and that’s unusual for you, call your issuer and explain how it happened.”
BONUS TIP!
If you’re late with your payment it could hurt your credit score. The good news is that usually, you have to be at least 30 days late before your late payment is reported to the three major credit reporting bureaus. Simply put, being a few days late shouldn’t hurt your score.
Credit card fee negotiation strategies
Over the years, I’ve frequently been asked how to negotiate credit card fees. Fortunately, it’s a straightforward process. Here are some general tips:
Be courteous: Campbell recommends making sure you’re not flustered when you call and to “be mindful to be exceptionally courteous. Inquire of the person who answers if they have the authority to reduce or eliminate your fee.” If not, respectfully request to talk to a credit card manager or a person of authority.
Ask for the retention department: Steele emphasizes the importance of making a phone call. If you are trying to get a fee waived, you should consider being aggressive (but still polite) if your card company isn’t willing to work with you.
“You will need to speak with someone in the retention department. You can either tell the first line representatives that you are considering closing the account, or just call and ask to speak with retentions,” he says.
Speak up for yourself: Campbell’s approach is that if you have a positive history as their customer, that you should “emphasize that right off the bat. Explain you’d like to continue to be their customer.” And then explain that “leniency toward your incurred fee would help you get back on track and continue your good customer legacy.”
She adds that “if you’ve experienced unexpected distress, be up front about it with a minimum of details. Make the point and ask directly for the type of waiver or reduction you’d consider appropriate.”
Be organized and smart: Harzog suggests that prior to making a call that you “make a bullet list of the points you want to make so you come across prepared and logical.”
Also, don’t call and ask for concessions if you have a sloppy payment history. “You’ll be calling attention to yourself when you can’t withstand the scrutiny. I know of people who had a below average payment history and actually ended up getting their credit limits lowered when they called their lenders!”
Use leverage to your advantage: The card industry is very competitive and, as noted above, it’s expensive for an issuer to get a new customer. As a result, Harzog is an advocate of using card offers from other issuers that you’ve received in the mail or have seen online as a negotiating tool.
The thought process here is that if you give the impression that you are being courted by other issuers (you can mention specific offers), your current issuer will want to keep you from abandoning ship. She also adds that if you have good credit, then use that as leverage since consumers with good scores are often more desirable than those with bad credit.
➤ SEE MORE:Tips to avoid credit card late fees
Final thoughts on negotiating credit card fees
Negotiating card fees may sound intimidating and time-consuming, but it’s really not. A quick phone call using the simple tips listed above can help you potentially save a lot of money.
The bottom line is that time is money. If it takes you five minutes to save $30 in fees, that translates to an hourly labor rate of $360! And, unless you’re making over $360 an hour at your current job, I would say that that is time very well spent.
