Tag Archives: The Psychology of Money

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.



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

How (Not) to Spend Your Way to Happiness


As the recession continues and more and more people look for ways to cut back, being aware of (and cutting out) excess lifestyle inflation can be the easiest way to cut back expenses (sometimes dramatically) while getting more pleasure out of your purchases.

What is Lifestyle Inflation?

“Lifestyle inflation…is when you have more money and increase your spending to match that. It is why even with a raise, sometimes, you just don’t feel like you’re making any more progress or getting any closer to being ahead.”  Source: Paidtwice.com

  • I’d define lifestyle inflation as a change in the baseline of your financial life. Lifestyle inflation is the difference between a college kid whose idea of a “fancy” meal is one that doesn’t include pizza and a 30-year-old who considers a $55 restaurant tab with a friend an “average” dinner.
  • Lifestyle inflation occurs when you are spending more money but are not necessarily experiencing an equivalent increase in happiness.  It has implications way beyond supporting the now clichéd motto, “money can’t buy happiness.”

The US  & Life Style Inflation
Years of technological advances and relative prosperity have made our lives more comfortable and convenient than the lives of people in our parents’ or grandparents’ generations. That said, studies on happiness overwhelmingly report that we are equally as happy  (if not less so ) as those who preceded us.
It is puzzling because, as noted by David Myers in his book The Pursuit of Happiness, our new wealth represents not just flashier toys but safer cars, advances in life-saving medical technology, and an endless number of new ways to communicate with the people we love.  That said, US citizens as a whole are not any happier than they used to be.

Recent Grads  Have the MOST Problems with Lifestyle Inflation

  • Because when you graduate from college you usually find yourself suddenly getting this thing in the mail every month called a paycheck.  Looking at the zeroes in the check you can’t help but hear a little voice somewhere inside saying, “Goodbye eating at Burger King! Goodbye asking mom and dad for money! Hello plasma flatscreen TV and leather La-Z-Boy couches!!!”
  • Because well-intentioned parents make it worse. Wanting to reward their children for hard work throughout college and ease the transition into “real life,” they subsidize rent, buy furniture for new apartments, and send periodic checks in the mail to make sure little Johnny is “still able to have some fun.” While it’s nice of them, it creates a lifestyle that’s impossible for a recent grad in an entry-level job to sustain  (and, I’d argue, takes away the pride of earning and saving and proudly buying those things with your own money, but then again, even Beyond Beer Money can be old fashioned sometimes).

Why Lifestyle Inflation Sucks.
Actually, not all lifestyle inflation sucks. Some lifestyle inflation is good (you can only spend so much of your life subsisting on beer and pizza). The problem with too much lifestyle inflation is that “luxuries” become less luxurious and exciting over time.

  • Surveys of the rich individuals reveal that they view as “necessities” the things most people view as relative “luxuries” (such as home cleaning services or a 2nd or 3rd car). Rather than getting more pleasure out of these conveniences, they simply take them for granted – ending up no happier than those without them. “Luxuries” need to be larger and larger to feel luxurious.
  • I’d argue that many midlife crises are the result of unchecked lifestyle inflation (“I have a BMW and a large house and all the latest gadgets. Why am I not happy?”).

What You Can Do About It.

  • Be Aware.

Tracking your income and expenditures (as advocated in my earlier post) is 1 way to catch lifestyle inflation. My lifestyle inflation usually appears in my “eating out” category. If I spend $80/month for several months and then see I am suddenly spending $160-200/month on eating out and am not twice as happy, it’s time to scale back.

  • Who Are You Comparing Yourself To?

Lifestyle inflation often occurs not because you’re earning more money but because the people around you are spending more. Again, just be aware of it. Who are you trying to impress? (friends, co-workers, parents, boy/girlfriend) What do you get out of impressing them? (pride). Who is trying to impress you? (ironically enough, often the same people you’re trying to impress). If your friend group goes out for fancy dinners every Friday night, it’s likely that the real value is in spending time together, not in $20 appetizers. Suggest going out just for drinks instead, or throwing a dinner party at someone’s house (which is more intimate anyway).

  • Try Temporarily Downsizing

Most people have a very negative initial reaction to this (“I earn my money so I should get to enjoy it.”). These people aren’t getting it. The goal of temporarily downsizing isn’t to deprive yourself, it’s to bring the excitement back to the things you spend money on.

For me, not eating out for a week or two lets me get more pleasure out of taking friends out later on down the line. Similarly, I’ve never had cable in my home because it’s not high on my priority list. Staying in hotels is thus extra luxurious for me as I catch up on all the trash TV I love but am not willing to pay for on a monthly basis.

  • Calculate ”Bang for the Buck”

This is my favorite way of assessing purchases and stopping impulse buys. It’s easier than temporarily downsizing, but still a good way to remind myself that money cannot be spent twice.  Bang for the buck is simply being aware of how much pleasure you get out of the money you spend on various items. It is different for every person.

I’m not a big fan of buying $8 drinks at bars. That $8 gives me a lot more bang for the buck when put toward concert tickets or travel abroad.   Other low bang for the buck items I tend to forego: expensive jewelry  (I worry about/lose it), books (I’d rather get them from the library and not have to store/dust them), flying 1st class, eating at expensive restaurants, staying in fancy hotels, MochaFrappa whatevers at coffee shops.
High bang for the buck items I’m willing to pay top dollar for: travel (my biggest expense category by far), North Face gear (I spent $100 on my backpack but have been using it for 8 years, ditto on my fleece), comfortable shoes (my knees are bad, so Pumas are worth every penny for me).

Your “bang for the buck” items will be different than mine. No matter what they are, by being aware of them you can cut spending in areas you get less pleasure from and funnel that money toward things you’ll really enjoy.

What are YOUR high and low bang for the buck items?

How do you deal with lifestyle inflation?  Feel free to email me or comment below.


Filed under Saving