Compared to Prior Years, Success Rates Dipped Slightly But Cardholders Can Still Get Better Terms Just by Asking
In recognition of Financial Literacy Month, LendingTree has published the findings to its annual survey of credit cardholders on whether they asked card issuers for better terms in the past year, like a lower APR or a waived annual fee, and the outcome. Only 15% of cardholders asked their credit card issuer for a lower APR, yet 70% of those who asked were successful, and the odds are even better for other credit card terms. Success rates may have dropped in several categories, but the probability of getting better credit card terms is still high enough to make it well worth the effort to ask.
Key findings
- 70% of those who asked for a lower APR in the past year got one.
- Only 15% of cardholders asked for a lower APR in the past year.
- The average APR reduction was 6.9 percentage points.
- In last year’s survey, 83% of those who asked for a lower APR were successful, a 13-point difference from this year’s survey findings.
- Annual fee waivers or reductions (down from 92% last year to 90% this year) were still the most likely request to be granted.
- A higher credit limit (up from 83% to 84%) was the second-most likely.
- Balance transfer fees and foreign transaction fees becoming more likely to be waived. Success rates for these requests improved by 5 points from last year, growing to 61% and 58% respectively.
- Men consistently ask their card issuers for breaks more than women do. The gap was largest when it came to late fee waivers (21-percentage-point difference), even though women were slightly more likely to be charged a late fee (24% versus 23%).
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“When you combine those strong odds with the amount of money you can save, especially when your card’s APR is lowered, there’s no doubt that it can be well worth your time to ask,” said Matt Schulz, Chief Credit Analyst at LendingTree. “Still, not enough people do. The two biggest reasons for not asking? People didn’t know they could, and they didn’t think they’d be successful. We’re hoping to end those misconceptions and help consumers realize the power they have.”
Schulz adds, “These findings should also serve notice that people should make these requests sooner rather than later. For example, we don’t know whether issuers will continue to be stingier about reducing cardholders’ APRs. However, given that the Federal Reserve is likely to raise interest rates several more times this year, making it more expensive for banks to lend money, it is a distinct possibility that issuers will continue to become less receptive to those who ask for lower rates, waived fees or better terms.”
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How to ask card issuers for better terms:
- Lower APR: Use other credit card offers or current APRs advertised on the issuer’s website. If you have good credit and you’re not getting the best possible rate, ask them to change that.
- Annual fee: Issuers may not waive fees entirely, but they offer to reduce the fee or offer extra points, rewards or other options. Think through what you’ll accept before you ask.
- Late Fees: You probably don’t have to do much more than just ask nicely. If you’re a first-time offender, it is pretty likely they’ll waive the fee. Cardholders who are habitually late on payments won’t have as much luck. Setting up an auto-payment feature may help to convince issuers you’re serious about repayment.
- Higher credit limit: If your income has recently increased, getting a higher credit limit might be as simple as informing your issuer of the change. It can also be wise to tell your issuer that you’re asking for a higher limit in order to boost your credit utilization — how much debt you have compared to your available credit — and help your credit score.
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