The question that could save you $1,346
One simple request is succeeding more often than anytime since we began tracking it.
Hi there, my friend.
My favorite report for LendingTree, which I put out every year, came out last week, and it has some much-needed good news for people struggling with high prices.
84% of credit cardholders who asked for a lower interest rate on one of their credit cards in the past year got one, and the average reduction was 6.3 percentage points.
That’s the highest success rate in the six years in which we’ve asked, which is saying something, given that the success rate has been lower than 76% just once — in 2022, when it was a still-sky-high 70%. It is further proof that it isn’t just people with 800 credit scores, long track records and a friend who works at the bank who get their way. Regular people who really need the help do, too.
It isn’t just interest rates that are getting lowered. Banks are waiving or reducing balance transfer fees, late fees and foreign transaction fees more often, too.
A pleasant surprise, though not all the news is good
I must confess that every year we do the survey, I get a little nervous that the success rate is going to fall off a cliff. This year was certainly no different.
Oh, man, is this the year that this stops working? There’s so much uncertainty around, well, most everything. Maybe banks will be a little less giving this year.
Nothing could be further from the truth. Banks are becoming even more willing to give a break to those who reach out, according to our data. Unfortunately, however, slightly fewer people are taking that step. Just 23% of cardholders asked, down from 25% last year.
To be clear, we’ll never have 100% of cardholders ask. About half of cardholders never carry a balance, so their interest rate doesn’t matter. (Typically, only those who carry a balance from month to month are ever charged interest, though there are some exceptions.) Many who do carry a balance don’t carry a big enough one to make it worth sweating over a few points on an interest rate. Still others don’t know they can make the call, don’t think they’ll be successful or just don’t want to try.
All that said, however, there is no question that there’s room to improve those numbers. Part of my mission is to ensure that happens.
Why this is such a big deal
My central message is that you have more power over your money than you realize, and that you can pay less, earn more and keep more of your hard-earned money by asking the right questions in various everyday situations. It is what Ask, Save, Earn is all about. It is what my book, “Ask Questions, Save Money, Make More: How To Take Control Of Your Financial Life” is all about. It is what my mission is all about.
There are few stronger examples of that power than asking for a lower interest rate on a credit card. That’s because the success rate is crazy-high, and the impact can be really significant.
Here’s what I wrote in the LendingTree post:
If you’re successful, it can save you $1,000 or more, depending on how much you owe.
Here’s how:
The average APR reduction was 6.3 points. That’s like moving from 25.00% to less than 19.00%.
If you have $7,000 in credit card debt, an APR of 25.00% and you pay $250 a month, you’ll pay $3,615 in interest and take 42 months to pay it off, according to LendingTree’s credit card interest calculator.
Reduce that APR by 6.3 points to 18.7% while keeping everything else the same, and you’ll pay $2,269 in interest and take 37 months to pay it off.
That’s a savings of $1,346 from a single request — all from simply asking.
That’s a whole lot of money for a phone call. If $1,300 isn’t enough to get you to make a phone call, you’re living in a way-different tax bracket than I am.
How to do it
Not all requests you make of your credit card issuer are created equal. For example, if you want a late fee waived — and our survey showed that a record percentage of those requests were granted last year, too — chances are that all you need to do is call an 800 number and ask nicely. Sometimes it is even easier than that.
Getting an interest rate lowered may take a little bit of extra legwork, however. My book goes into great detail about what to say, including word-for-word scripts. (You can get a sample of those scripts in the free guide, “3 scripts to lower your bills today,” which goes out to all new Ask, Save, Earn subscribers.)
I also went into more detail about how to ask in the post I wrote about last year’s edition of this survey.
It’s all about information. Got a credit card offer with a good interest rate in your email or snail mail lately? Remember it. Noticed when you look at your card issuer’s website that you aren’t getting the best rate that they’re offering? Make a note. (Here’s an example of a page where a giant bank lists all of their cards and the possible interest rates associated with those cards. Other banks and credit unions typically have something similar.) Know that your credit score has gone up recently but you haven’t told the bank? Change that. All of these things can help you frame the conversation.
“Hi, I have a card with a 25% interest rate, but I saw on your website that some people are being offered a rate as low as 18%. Who on your team can I talk to about getting my rate lowered?”
Script it out. My book includes word-for-word scripts on how to ask for so many breaks from your credit card issuer, as well as other financial moves. However, if you haven’t gotten your copy yet, you can still write down what you’d like to say. Don’t worry about anticipating every single thing that could possibly happen, though. Thinking through how you’ll start the conversation, what personal details to add and how you might handle a few possible questions from the rep can go a long way to helping your confidence. You can even consider role-playing with a trusted friend to take that practice to the next level.
Don’t be a jerk. People want to help people they like. It often really is as simple as that, so be nice. That doesn’t mean that you should be a pushover, but it does mean that you’re probably better off skipping the alpha-male BS bluster.
Don’t be afraid to try again. The first answer isn’t always final. Sometimes you catch someone on a bad day, for example. Maybe you forgot to mention an important detail. Perhaps you didn’t think to ask to speak to the manager. Calling back and trying another time or two when you’re rejected probably won’t hurt. (After the third or fourth rejection, however, it may be time to take the hint.)
It won’t always work, but it likely can’t hurt to ask.
Even if you don’t need a lower interest rate, you could pay the knowledge forward by sharing it with a loved one who might be able to benefit from it. As good as helping yourself can feel, helping those closest to you save money can feel just as good or better.
Share your success stories
If you’ve ever done this successfully, I’d love to hear. How did you do it? What did you say? Were you scared? Was it easier, harder or about the same as you expected? Tell us in the comments below.
In other news… Happy World Cup kickoff day!
My family has been into soccer since my son started playing when he was little, so we’re all super-excited that the World Cup is here in the U.S.
We’re even going to go to a match in Dallas in a couple of weeks. We were fortunate enough to have matches that were just a short drive from Austin and to get tickets at face value early on, without having to use the secondary market.
Still, even with that, it ain’t cheap. We did a study at LendingTree that broke down the cost of going to an opening-round match in person in various parts of the country. (Spoiler alert: It is crazy high.)
Do you care about the World Cup? If so, share your predictions and hopes below.
Until next time!
Matt
Great post as always, Matt! I haven't tried this as we currently (and thankfully!) have paid our revolving credit card debt off and now only have a credit card(s) we pay off monthly. However, looking back, I wish I'd done this with a card that carried some of our medical debt. I will definitely keep this in mind for the future if needed.