Tag Archives: Inspiration

Want That Credit Card Fee Erased? Ask For It!

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

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.

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Filed under Credit, Stop Being A Financial Idiot, The Psychology of Money

How to Supercharge Your Savings

superchargeyoursaving

Much of the personal finance advice out there can be summed up in 3 words: Save more money. While the road to riches  isn’t really that simple, saving money is a good place to start. That said, saving money involves a lot more decisions than you would think. Just for you, I’m going to tackle the 3 biggest saving questions:

  • How much should I save?
  • What should I save for?
  • Where should I put my savings?

1. How much should I save?

  • The general rule of thumb is that you should save at least 10% of your income (think of it as tithing to yourself).  (FYI: If you ask 10 different financial gurus what percent of your income should go into savings, you’ll get 10 different answers. When you really get down to it, the percent of your income that you should save obviously depends on you – your income, your debt, your expenses, etc…)
  • Saving 10% of your income may be hard: For people that are severely in debt or have a serious love of shopping, this number may feel huge, but I’d recommend saving something even if you can’t commit to 10% of your income.  Even David Bach, the author of Automatic Millionaire and super promoter of saving (his plan, which he calls “paying yourself 1st,” encourages you to put money into savings before paying bills or even paying off debt) acknowledges that saving even 1% of your income is better than saving none at all.
  • For saving inspiration: check out the book A Million Bucks by 30. The author, Alan Corey, lived in the Spanish Harlem and ate Ramen noodles every day for several years in order to save more than 50% of his meager income. Lots of Ramen and several lucky real estate deals later, he was able to add himself to the list of American millionaires before his 30th birthday. While I wouldn’t necessarily recommend this strategy (can you say “high blood pressure”?), if he can do that, you can put away 10% of your income to pay for your future.

2. What should I save for?

  • Retirement:  Saving for retirement is easily the most common savings goal. Most companies offer retirement savings in the form of an IRA, or individual retirement account. Saving for retirement can be especially beneficial if your company has a program that matches contributions you make to your IRA. Most companies do this up to a certain limit (often around $1000). If you are not putting in enough money to take full advantage of your employer’s IRA matching plan, you might as well be throwing your money out the window. (Email me and let me know which window).
  • and Beyond: After retirement (a no-brainer), savings goals can get a little confusing.  For some people, dividing your savings into various pieces can be motivating (i.e. having a different bank account in which to put savings toward your new motorcycle versus savings for unexpected emergencies). Nonetheless, I think finance gurus spend their spare time brainstorming outrageous new “must have” savings funds for the average American (having a vacation fund is one thing but having a separate savings account for unexpected pet expenses? For each pet?  Come on.) For me, it all just seems more of a hassle than it is worthwhile.  (For a good example of mini – savings funds gone wild, check out iwillteachyoutoberich.com. While I normally love Ravit’s blog, he’s gotten carried away here.) My advice: Open a savings account and write a list of clear definitions about what it can be used for (Unexpected car maintenance? Yes. Unexpected bar tab? No.).

3. Where should I put my savings?
To keep it super simple, here are 3 basic options.

  • Open a savings account in a traditional bank: Offers easy access to your money and a (gasp) real person to talk to if you have any problems. Check out http://www.bankrate.com to compare the interest rates of banks in your area.
  • Open a high yield online savings account: Upside is that interest rates are usually slightly higher than traditional banks. Downside is that you’re likely to spend a lot of time listening to awful elevator music if you ever need help (customer service hotlines suck) and your money isn’t an instantly accessible as it is in a traditional bank. I use E*Trade because they have a $1 minimum and a simple user interface.  No matter what, always ensure that the online institution is FDIC insured (i.e. legitimate).
  • Buy a CD (Certificate of Deposit): I would explain CDs, but I think JD Roth, the author of Get Rich Slowly, has already written the best description of CDs known to man, so I’m just going to send you check it out.

Ok. That’s it. Go save like a champ.

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Filed under Financial Resources, Saving