Winning Financially in 2025: Getting a Deal with Your Credit Card
Money Rehab with Nicole Lapin
Deep Dive
What are the three key things you should negotiate with your credit card company?
The three key things to negotiate with your credit card company are the annual fee, the APR (interest rate), and late fees. These negotiations can help you save money regardless of whether you have credit card debt or a perfect credit score.
Why should you negotiate the annual fee on your credit card?
Negotiating the annual fee can save you money, as credit card companies often spend around $700 to acquire a new customer. They are likely to offer retention credits, fee waivers, or reductions to keep you as a customer. Using phrases like 'I'm considering closing my card' or asking for the retention department can help you secure these offers.
How can you negotiate a lower APR on your credit card?
To negotiate a lower APR, highlight improvements in your credit score and emphasize your loyalty as a customer. Request to speak with a manager or higher authority, as this is not typically handled through virtual chats. If denied, you can ask for a temporary rate reduction to ease your financial burden.
What is the average late fee for credit cards, and how can you dispute it?
The average late fee for credit cards is $26, accounting for 99% of penalty fees. To dispute it, call immediately after the fee appears, pay the late amount beforehand, and provide a brief explanation for the delay. Mentioning competitive offers from other card companies can also strengthen your bargaining position.
What is the impact of closing a credit card account on your credit score?
Closing a credit card account can negatively impact your credit score, as it reduces your available credit and may increase your credit utilization ratio. It's important to use the threat of closing an account as a bargaining chip carefully and only follow through if absolutely necessary.
What is a good credit utilization ratio to maintain for a healthy credit score?
A good credit utilization ratio is keeping your credit card balance below 30% of your overall credit limit. For example, if your credit limit is $3,000, aim to spend no more than $1,000. This ratio is a significant factor in determining your credit score.
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