Issuers Quick to Waive Credit-Card Fees
Annual credit-card fees aren't set in stone. In fact, many people who ask their credit card company for a break get it.
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 about 950 card users. Indeed, several large credit-card lenders told The Wall Street Journal that they often give in to such requests. The card companies didn't want to speak publicly about their actions since that could encourage more card holders to ask for breaks on their fees.
Intense competition between credit-card issuers is the main reason for this flexibility on fees. Nearly every large bank is dying for market share in the credit card market.
Intense competition between credit-card issuers is the main reason for this flexibility on fees. Nearly every large bank is dying for more market share in the credit-card market.
To this end, card issuers have been paying out more in rewards in recent years to boost card usage and revenue. One of the biggest appeals for lenders is the double-digit interest rates that many borrowers pay on card balances.
The willingness to bend on annual fees, though, doesn't necessarily hold true for all credit-card lenders.
Among card users who ask for breaks on fees, those who have the best luck tend to be those who are on time with their payments and threaten to stop using the card or to close it if the fee isn't waived, according to CreditCards.com and banks.
Some lenders say the annual fee can be waived as soon as the first or second year of having the card. One large lender said it has been giving in to more of these requests in the past couple of years.
Other terms are also flexible. Some 87% of card users who asked their lender to waive their late fee were successful, according to CreditCards.com survey.
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.
In some instances, card holders can get an annual fee waived if they agree to spend a certain amount on the card within a set period according to one card-issuing bank.
One of the requests most likely to be granted isn't associated with fees. Many banks are offering increases for credit-card spending limits.
That can have the added benefit of helping to boost a consumer's credit score and can be a signal a card lender views that person as a better credit risk.
The cardholder's credit score is more likely to rise if he or she doesn't take out more debt using the increased borrowing limit.
Source: The Wall Street Journal