Winning Financially in 2025: Getting a Deal with Your Credit Card

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3:14hey it's morgan the executive producer of the show and as you know this week we are re-releasing episodes of money rehab that will make the biggest impact for your financial resolutions for 2025 today's is a sneaky one it is the three things that you absolutely should be negotiating with your credit card. And you might be thinking, is this just about credit card debt? The answer is no. These tips will help you regardless of whether or not you're in credit card debt. Even if you have a perfect credit score, even if you love your credit card, these are three things that you absolutely should be negotiating.

3:49So listen up and start today. Last week, I was on Good Morning America. I mean, actually, it could have been the week before. What is time anyway? Anyway, recently, I was on Good Morning America, and I had a lovely chat with the hosts there, DeMarco and Eva. I told them about the things we all need to be negotiating with our credit card companies. And there are three biggies, the annual fee, the APR, and late fees. I told them this, and I'll tell you this too. If you're not negotiating these three things, you're leaving money on the table, period, the end. But you don't need to go at it alone.

4:23I'm going to give you the script for these three conversations with your credit card company. Number one, annual fee. This is my new favorite thing to negotiate. I did it and I I recorded the whole conversation for Money Rehab. I linked that episode, if you haven't heard it yet, in the show notes. And I have to tell you that in the 100 ,000 years I've been covering money news, I have never personally called and done this myself. So recently I did it, and spoiler alert, it worked. Oftentimes we sign up for cards when there are special offers on the annual fee, and then the next year when it hits your statement, you're like, what the heck?

4:55It feels like a shock. So here's what I want you to do. Call and ask for a retention credit. it. That is the magical word. Think about it this way. Put yourself in the credit card company's shoes. They spend upwards of$700 to acquire a new customer, so they're most likely going to throw you a bone versus losing you as a customer because it was expensive to get you in the first place. Here's the cheat code. Say, I'm considering closing my card or I'm not sure if I can pay the annual fee on my card. Each credit card company has a different process, but ask for the retention department because there might be a specific department dedicated to making sure customers don't leave.

5:34Once you get to that department, say, hi, I've noticed that the annual fee on my card just posted and I'm not really sure I can justify paying it another year. I really do like XYZ benefits, but I'm not sure about this annual fee. I was wondering if you could check if there are any retention offers available on my account that might help me make up my mind. Usually they'll have some offer. They could be in the form of an annual fee waiver or reduction, a statement credit, or miles. If they're making you choose between miles or statement credit, quickly go to the site and check out the miles to cash calculator and see which offer, the miles or the cash, will be more valuable to you.

6:13Oftentimes, the cash equivalent of the miles will be higher than the statement credit they offer. This is what happened to me, but always good to check. Number two, APR. Remember, the APR or interest rate on your credit card is linked to your credit score. So it's like a seesaw. The higher your score, the lower your rate because you're seen as more responsible to the card company and more likely to pay back the debt. But that rate is not set in stone. So here's the cheat code for the APR. If you've done some credit hygiene lately and you've improved your credit score since you've got the card, lead with that.

6:47Hopefully you've also paid on time, so talk yourself up as a great, loyal customer. And be a dog on a bone with this. Ask for a manager or get as high up in the company as you possibly can. This is, by the way, not a virtual chat thing. Sorry, millennials who don't want to talk to humans. This is an actual phone call. If you get denied and you're worried about paying down your current balance, you can always ask for a temporary rate reduction, which will at least give you some reprieve. Number three, late fees. The average customer late fee is$26 and accounts for 99 % of penalty fees and more than half of all customer fees.

7:26So if you get slapped with one, fight it. Especially if you're not a chronic late payer, you'll have the best chance of success if you call right away after you see the fee hit. You'll also have the best chance of success if you actually pay whatever is late before you call. So here's the cheat code for late fees. I would just honestly apologize for being late and give a brief explanation about why that happened and why it won't happen again. Also be armed with other competitive offers for other card companies you could potentially move to if you don't get what you want. I love threatening to leave or cancel my card, but use that as a bargaining chip and be really, really careful before actually doing it because closing an account will impact your credit score.

8:09For today's tip, you can take straight to the bank. You'll have more leverage for negotiating if your credit score is on point. If your credit score isn't where you want it to be, this sucks to hear, I know, but the good news is that you can improve your score by practicing some good credit hygiene. One thing I would do today is make sure your credit card balance is no more than about 30 % of your overall limit. So if the limit on your card is three grand, try not to spend more than a thousand bucks. A big factor in determining your credit score is the ratio between what you're borrowing and what you have access to with credit.

8:42If your bank thinks you owe more than you can pay back, your score will fill the backlash. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some Money Rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. and follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content. And lastly, thank you.

9:18No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.