Paying credit card fees is a lot like......

I read a lot of finance blogs and books. While there is plenty of advice out there I don’t believe, the most common piece of advice I just can’t swallow is the idea that if you get any sort of late fee/overdraft fee, etc.. on your credit card, you can have it erased  by simply calling them and asking nicely for it to be removed. I bet I could also ask nicely for Brad Pitt to marry me, or the queen of England to give me 1 million bucks, or…. well, you get the picture.

My Rookie Mistake

Fast forward to this spring, when I overdrafted my credit card $21 and was hit with a $39 fee.

• WARNING: You should NEVER, EVER, EVER come anywhere near doing this! This not only lowers your credit score – which is based partly on how much of your available credit you use  – but is a REALLY, REALLY stupid idea. I could give you a list of lame excuses as to why I did this but they are just that, LAME. Learn from my mistakes! OK, moving on…

Making the Call

It just so happens that at the time I was in the midst of Ramit Sethi’s new book,    I Will Teach You To Be Rich, which includes not only advice on what fees you should ask to be waived, but also simulated phone conversations demonstrating what you should say.

Some advice when making the call:

• Be firm. (“I would like this fee removed” is more powerful than “Can you remove this fee?”)
• Be nice. You can be firm without being a jerk. Just be persistent.
• Remind them what a good customer you are (Ramit suggests the phrase, “I’ve been a customer here for 3 years and I’d hate to let one fee drive me away from your service”)
• If all else fails, ask if there’s a manager or someone else you can talk to
• Lastly, keep a record of the date you called, who you spoke with, and what was said/decided upon. Ask for the representative’s identification number and write it down.

With all of the above in mind, I sat down and called Capital One…. and shockingly it went largely  like all these financial advice folks had been saying it would.

• I was firm but nice, agreed with them as they chastised me for making a mistake but stuck with my guns that I would like the fee removed nonetheless.
• I asked for a manager when the request was at first denied.
• The manager said he would “Look into it and call me back.”
• And… I got a check from Capital One refunding my $39 in the mail several weeks later! Not a bad use of 3 minutes of my time.

Taking it to the Next Step

Feeling cocky from my $39 success, I did some research into other things you can get  simply by calling and asking for them.

Other things to request from credit card companies:

• Annual fees waived
• Late fees erased
• Lower APR (i.e. interest rate)
• Credit increase

• FYI: Just because you can flex your persuasive muscle to get these perks doesn’t mean you should use them. Even a very low APR doesn’t justify carrying a credit card balance, and erasing late fees doesn’t meaning that making late payments has no consequences.

Moral of the Story

Credit card companies stand to make big money off of you and will bend over backwards to keep you as a customer. Use this to your advantage.

P.S. Caveat to the Moral of the Story: Banks do not operate the same way.

Banks don’t make nearly enough money off the average Joe to justify erasing fees. If you get an overdraft fee at a bank  and ask to have it removed they may actually laugh in your face (unless it was a computer error in which case they’ll do it). Don’t say I didn’t warn you.

What are your experiences with this? Have you ever called to have a fee removed? How’d it go? Leave a comment or email me at beermoney.mail@gmail.com and let me know.

Weird advice, I realize, considering the whole idea of credit is the joy of spending money you don’t have. That said, paying 18% interest to a credit card company is pretty similar to throwing your cash out the window.  I recommend getting a credit card because they are convenient and it’s important to build your credit – but only if you can pay off the minimum balance each month.

2. Pick a good credit card

…Preferably one that will give you rewards you will actually use (like cash back, but check the percentage, 1% cash back is not going to fund your trip to Tahiti) and has an easy online interface. I’m a big fan of Capital One credit cards because they’re very customizable, customer service is good, and their website is easy to navigate.

For other card recommendations, check out credit card recommendations for new college grads on www.moneysmartlife.com and/or www.moneyunder30.com.

3. Get your FREE yearly credit report. Every year.

A better use of the time you spend facebook stalking ex-boyfriends and girlfriends, go to:  www.AnnualCreditReport.com.

There are 3 companies that track your credit. Check all once per year or 1 every 4 months. Make sure to fix any mistakes before they can negatively affect your credit score (making it harder to borrow money for a home or other investment).

4. Ask for a lower rate!

Call your credit card company once every 6 months and ask for a lower rate. They’ll usually say yes, and while it’s best not to carry a balance, if you’re going to have a balance might as well have a low rate.