Study Shows How Credit Cardholders Miss Out on Savings by Not Asking for Rate or Fee Discounts

Study Shows How Credit Cardholders Miss Out on Savings by Not Asking for Rate or Fee Discounts

credit card news

Ray FitzGerald
By: Ray FitzGerald
Posted: June 7, 2018
Our finance experts and industry insiders blog the latest news, studies, current events, and other interesting tidbits from inside the credit card industry.

Most people learn at an early age that it doesn’t hurt to ask for something. Toddlers quickly figure out that aiming high and asking for 10 cookies may yield one or two cookies after dinner. Any parent of a teenager knows to expect a call at some point when their child is spending the afternoon with friends at the mall — a call that often starts with “Can I have…”

Despite the early training, many people become adults who take part in the “what you see is what you get” world where they rarely ask for a discount or change to the normal procedure.

For those people, it can hurt not to ask.

In March 2018, commissioned a survey of 1,051 credit card users that found that very few consumers have contacted their credit card issuer and asked to have a late fee waived, their annual percentage rate (APR) lowered, or their credit limit increased.

In the competitive world of credit card issuing, where banks and brands jockey for positions in consumers’ wallets, cardholders don’t often realize how much power they yield in determining their fee and rate structures.

“Never underestimate how much you can leverage your buying power and the longevity of your relationship with a credit card company,” said Ahmad Abusamak, Content Specialist at CompareCards.

The study found that only 25% of respondents said they had previously asked their issuer for a lower APR on one of their credit cards, and 60% of respondents said they had never called to request the removal of a late fee. Only 40% of the cardholders surveyed said they had called to request a higher credit limit on one of their existing cards.

Consumers Often Have Their Requests Granted

Despite the staggeringly low number of consumers who have contacted their card issuer to ask for a fee or rate reduction, the survey showed far more approvals than denials.

“Credit card companies need to keep customers happy,” Ahmad said. “They have the incentive to make that happen and are often willing to grant these requests to ensure a customer stays with the card.”

Approximately 64% of those who asked for a lower interest rate had their request approved — with a reported average rate reduction of 5.5 percentage points. Just over 89% of users who asked for a late-fee waiver were granted their request. Credit limits increased by an average of $2,059 for 64% of respondents who called and asked for a credit limit increase.

A Graph Showing the Success Rates of Consumers Who Asked for a Decrease in a Credit Card's APR Terms

This graph shows how often consumers asked for a lower interest rate and how often they received the decreased rate, according to a survey.

Note, though, that most credit card issuers have rules in place that dictate the frequency of cardholder spending limit increases. Your odds of success in requesting a limit increase may be lower if you’ve received a limit increase within the last six months.

A Small Time Investment Can Lead to Big Savings

Many consumers avoid contacting their credit card issuer to ask for a fee or rate reduction because they don’t want to spend the time on the phone only to risk the embarrassment of rejection. Years of consumer programming has many cardholders feeling as if they’re powerless when negotiating terms on a credit card or loan.

Thanks to the competition in today’s credit card marketplace, the balance of power is slowly shifting.

“Over the long term, the savings you’ll see from a waived late fee or interest rate drop will definitely outweigh the time you take to call the credit card company and ask for the savings,” Ahmad said.