The more we write about consumer credit habits, the more we start to realize that the average U.S. consumer has no idea what to do with a credit card.
Did you know that you can get a late fee waived just by asking. According to a survey by CreditCards.com, 89% of credit card holders who asked for a late fee to be waived got what they were looking for. Meanwhile, 78% of cardholders who asked for a lower interest rate received one. Granted, very few of you would realize that, since only one in five cardholders ever asks.
Sure, only 65% of cardholders were able to get a lower interest rate by asking in 2014, but a whopping 86% still had late fees waived by request. Your annual household income doesn't matter, but age certainly does. Millennials, or cardholders younger than 35, have an 84% success rate for requesting late fee waivers, but only 36% aren't outright laughed at when they ask for a lower interest rate.
“People have way more negotiating power with their credit card issuer than they think they do,” said Matt Schulz, CreditCards.com’s senior industry analyst. “The worst that can happen is they say no, but most of the time, they say yes. The credit card market is incredibly competitive right now and consumers should use that to their advantage.”
What they don't have is a firm grasp on how to handle those terms once they get them. A CapitalOne survey indicated that 52% of cardholders are concerned about mistaken or unwanted charges, but only 47% believe they should keep a more watchful eye on transactions. As a result free trial that turned into reoccurring charges stunned 36% of cardholders.
A recent online survey from NerdWallet conducted by Harris Poll, meanwhile, found that 54% of cardholders think that carrying a credit card balance helps their credit score. On top of that, 55% don’t know when they start being charged interest on credit card purchases. Not only is that first notion incorrect, but the second makes clear that U.S. cardholders aren't following the simplest rule to staying out of trouble with a credit card: pay it off each month.
“The only thing carrying a balance will do is cost you money,” says Sean McQuay, NerdWallet’s resident credit card expert and a former Visa strategy analyst. “Consumers who don’t pay their card off each month are charged interest on the average daily balance of said card. Sometimes interest charges are unavoidable, but you can’t pay for good credit via interest charges.”