The Easiest Way to Improve Your Credit Card Terms

Credit card holders can benefit from higher limits, lower rates and waived fees. Yet, few try to get them. Here's how to separate yourself from the crowd.

The Easiest Way to Improve Your Credit Card Terms Photo by Zivica Kerkez / Shutterstock.com

Sometimes getting what you want in life is as simple as asking for it. This is even true of credit card terms.

Most cardholders who ask for certain improvements to their terms get them, a recent shows.

About 1,050 credit card users were polled for the study. And among those who had asked for it:

  • 64 percent got a lower interest rate — with the average decrease being 5.5 percentage points.
  • 64 percent got a higher credit limit — with the average increase being $2,059.
  • 89 percent got a late fee reversed.

However, few credit card holders have bothered to ask for these changes. The study found that only:

  • 25 percent have asked for a lower interest rate.
  • 40 percent have asked for a higher credit limit.
  • 60 percent have asked for a late fee to be waived.

This means many consumers are likely paying more than necessary in interest or fees, or accepting a lower credit score than they’re capable of achieving.

Lowering your credit card costs

Obviously, getting a late fee reversed will save you the amount of the fee — which can be as high as $38, the Consumer Financial Protection Bureau. So, there’s no reason not to ask for a fee reversal.

That said, you should avoid making late payments when possible because they can ding your credit score.

Getting your credit card interest rate lowered stands to save you money over and over again if you’re someone who carries a balance from month to month rather than paying bills in full. This is especially true now that the Federal Reserve is raising the federal funds rate, which means credit card interest rates will rise as well.

Your credit card’s interest rate — technically known as the annual percentage rate (APR) — impacts every payment you make while carrying a balance. Asking for a lower rate can result in you paying less in interest every month.

I’ve requested and received this in the past. But if asking doesn’t work for you or doesn’t result in a substantial decrease in your rate — or if it does, but you’re carrying a lot of debt — .

There are now several zero percent APR credit cards with no annual fees. Transferring a credit card balance to such a card may be the best way to save on interest payments — aside of getting out of debt fast.

For more on these techniques, check out:

Raising your credit score

Even if you don’t think you need a higher credit limit, you could benefit from getting one. That’s because increasing your credit limit can decrease what’s known as your credit utilization rate — one of the biggest factors impacting your FICO and VantageScore credit scores.

Your credit utilization rate is the percentage of the total amount of credit available to you that you are actually using at a given time. The lower the rate, the better it is for your credit score.

As we explain in “Boost Your Credit Score Fast With These 7 Moves“:

“If you’ve maxed out your $1,000 card and get a limit increase to $2,000, you’ve instantly cut your credit utilization rate in half. The key is to not spend any of your new credit. It defeats the purpose of getting a limit increase if you immediately charge the card up to $2,000.”

However, before you ask for a credit increase, make sure to ask your lender if it will do a hard pull on your credit report before granting the increase. If it does, then asking for an increase could potentially hurt your score.

Have you ever asked for better credit card terms? Tell us how it went for you by commenting below .

Karla Bowsher
Karla Bowsher
I’m a freelance journalist and former newspaper reporter who has covered both personal and public finance. I've worked for a top 50 major metro daily and a community newspaper as well as ... More

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