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The simple way to avoid credit card fees that most people ignore

(Photo from Flickr user <a href="" target="_blank">NapInterrupted</a> used under Creative Commons license)
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During the recession, people saw their credit card limits slashed as their interest rates pushed higher.

Now that the economy is stronger, card issuers are more willing to give customers a break or a better deal– if only they would ask.

About 90 percent of credit cardholders who asked issuers to forgive late payment fees had their requests granted, according to a new survey by About two-thirds of people who asked for a lower interest rate were approved.

“It can’t hurt to ask,”  says Matt Schulz, a senior industry analyst for

Despite those high success rates, the report found that people hardly ever ask their credit card companies for such breaks. Only 28 percent of American cardholders have asked a card issuer to waive a late payment fee. Just 23 percent of respondents said they have asked for a lower interest rate.

That amounts to a lot of cash lost to extra fees for people trying to pay off their credit card debt.

Take someone with a $3,000 balance on a card that charges a 19 percent APR. If he makes only the minimum payment, it will take 11 years to pay off the debt plus $2,782 in interest, according to a calculator on With a 15 percent APR, which is the national average, that person would pay the card off in 10 years and face $1,799 in interest charges — nearly $1,000 less. (Of course, interest charges would be even smaller for people who pay more than the minimum each month.)

Still, some cardholders are more likely to get a break than others. Seventy-two percent of people in high-income households, or those earning at least $75,000, received lower interest rates after asking, compared to 55 percent of households earning $50,000 to $74,999.

When it came to having late payment fees waived, all cardholders had better luck: 93 percent of high-income households were successful, compared to 76 percent of those making $30,000 to $49,999 a year.

People’s chances also climbed with age. Thirty-three percent of 18 to 29 year-olds saw their interest rates lowered, but that went up to 59 percent of those between 30 and 49 and to 79 percent for people ages 50 to 64.

That said, more people are paying their credit card bills on time, so late fees are less of an issue for many consumers. More people are also paying their balances in full.

So why aren’t more people picking up the phone? One possible explanation that I’ve reported on before is that consumers focused on immediate needs and current bills might not even realize that they qualify for a better deal. A study released this year by, a Web site that helps people compare financial products, and professor Philip Zimbardo, the psychologist who orchestrated the Stanford Prison experiment in the 1970s, found that people’s financial decisions are influenced by their emotions and how they view time.

Researchers cited the example of a woman with high credit card debt who qualified for a lower interest rate because of her strong payment history but who was convinced after struggling for so long that she wouldn’t qualify for a lower rate.

In all likelihood, all she had to do was ask.


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