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Here’s how I negotiated out of bank fees — part 2

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Here’s how I negotiated out of a $20 overdraft fee and a $27.10 finance charge from Wells Fargo.

I accidentally overdrafted a couple weeks ago (overdrafting is when you don’t have enough money in your checking account to pay off your bills, so your bank helpfully transfers money from your savings or credit-card account. They also helpfully charge you $15-$30 for the service, wiping out all your interest for the year).

I had transferred money from my savings account to checking account to cover a temporary shortage, and the transfer arrived one day late. I saw the overdraft fee, sighed, and called the bank up to get it waived.

Can you negotiate bank fees? Yes, you can – and here’s how

This is how it went last time I called my bank to negotiate fees.

This time, I had a feeling they would be less than happy to waive my fees, but with a little coaxing…

Ramit: “Hi, I just saw this bank charge for overdrafting and I’d like to have it waived.”
Bank rep: “I see that fee…hmm…let me just see here. Unfortunately, sir, we’re not able to waive that fee. It was [some excuse about how it’s not waiveable].

Bad things to say when negotiating bank fees:

  • “Are you sure?” Don’t make it easy for the rep to say no.
  • “Is there anything else I can do?” Again, imagine if you were a customer service rep and someone said this. It would make your life easier to just say “no.” As a customer, don’t make it easy for companies to say no.
  • “Well, this Indian blogger dude told me I could.” Nobody cares…but it would be cool if 1,000 customers called their banks and said this.
  • “Okay.” Don’t give up here. Despite what you learned in sex ed, “No” does not mean “No” when it comes from a bank.

Try these techniques to negotiate bank fees instead

Ramit: “Well, I see the fee here and I’d really like to get it waived. What else can you do to help me?” (Repeat your complaint and ask them how to constructively fix it.)
Bank rep: “Hmm, one second, sir. I see that you’re a really good customer…I’m going to check with my supervisor. Can you hold for a second?”
(I’ve been with the bank for many years, which you should always use to your advantage when calling to complain. Banks pay hundreds and sometimes even thousands of dollars in customer-acquisition costs and don’t want to lose you.)
Bank rep: “Sir, I was able to check with my supervisor and waive the fee. Is there anything else I can help you with today?”

Key takeaways:

  • Mistakes happen, but don’t be dumb and overdraft like me
  • When complaining, have a clear goal and don’t make it easy for companies to say ‘no’ to your complaint
  • “No” is the beginning of the conversation

[Update]: Always, always track your customer service calls (you can use this free spreadsheet). When I logged in this morning, I saw that the bank had categorized the overdraft as a cash advance from my credit card and and charged me a $27.10 finance charge. I got that waived (with a fight), but imagine if you’re earning $400/week. Those ridiculous fees just took 10% of your income away, underlining this recent Washington Post article about Americans’ dissatisfaction with credit card fees. If you’re going to say, “But consumers should just read the documentation,” it’s just not that simple.

[Update 2]: To open a high-interest ING savings account (I use one), click here.

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  1. Another argument suggestion: Blame the fee on the bank, particularly on their technology. Ex: I overdrafted because my online balance wasn’t correct. They give you a little lesson on how charges take a couple of days to post to your online account, and usually refund your fee. Remember though, they will never admit they were wrong, but will refund the charges for the “confusion” they caused you. Also, remember to point out that (hopefully) “This has never happened before, I am a good customer!”

  2. Overdraft fees are ridiculous, especially when you have a large savings account and made a mistake by not transfering money in time.

    The fees most banks charge are often higher than if you were to go get a payday loan as a hold-over until your transfer goes through.

  3. That’s true, Ross, you could say anything, but it just seems distasteful. What do you guys think?

  4. I don’t really think its distasteful, its more of a matter of honesty and integrity. But hey are bankers that honest? 😉

  5. I’ve gotten lots of fees waved by calling up. It’s definitely important not to take them laying down.

    One good story goes like this:
    I signed up for a new credit card (wanted to have an AMEX card for the international recognition and travel features and BoA offered me one with no annual fee) and while I was activating, I was offered a balance transfer at 1.99%. After offering the balance transfer, there were some connection problems on the line but I heard the rep saying something about percentages. I asked, to double check, “Are there any fees associated with this transfer”. The rep said “no”, so I said “ok, then transfer $2000 from my account with Citibank”.

    A few days later, I see the transfer in my online account balance and a 3% ($60) fee attached to it. I immediately call up BoA and tell them that the fee is unacceptable and that I was told by the first rep that there would be no fee. They made some blah blah about how I was read the fee disclaimer and I explained exactly what had happened initially. After a few more rounds, I said “Fine, then just undo the transfer and forget it, I obviously transfered to _save_ myself money and with this fee that’s not going to happen”. (I had foolishly purchased a projector on credit that I wouldn’t be able to pay off for about 2 months, so figured that paying 1.99% was better than the 17.99 on the card I’d initially charged it to.) Anyhow, they said they couldn’t undo the transfer, and suggested I call Citibank.

    I tried that, but it got me nowhere, so I called BoA back and asked that they remove the fee again. Again explaining exactly what happened with the first rep. I repeatedly suggested that they go and dig up the tape of that first conversation, because they will clearly see that they have a problem with their rep and not with their customer if they do. At the end of that conversation, this rep removed the fee and I’ve happily gone on with my life paying just $0.27 in interest on a 1.5month 2000 dollar loan.

    This post has gotten long, but I do have one other suggestion to offer the readers here: If you are going to be late with a payment by a few days, for any reason, call your creditor up and ask for an extension _first_. I’ve twice had issues where I’ve forgotten to schedule an online payment in a timely manner and they’ve been able to extend my payment date long enough to get the payment in w/o fees.

  6. When I went to pay my balance in full one month, I got charged a $20ish dollar finance charge for short paying my credit card balance by 10 cents. Instead of starting out negatively, which isn’t going to help because no one likes to be yelled at or blamed for something they can’t control, I just asked what it was for and played dumb. Once she determined what the charge was for, she offered to remove it without me asking (probably because she realized it was bullshit). Instead of coming at her with, “Why is your bank so crappy that it couldn’t figure out that it was only 10 cents.”, I let her come to that conclusion on her own. I think if you start out in a nice way your odds of success are better. Just because they can, doesn’t mean they will, and if you’re an asshole I think your chances drop dramatically with that person, meaning you’re going to spend more time on the phone talking to someone else. But, I will say that sometimes you need to be a little tougher, especially when they’re trying to stonewall you and dragging out the call.

  7. I was viewing my AMEX Platinum’s balance online just last week (actually on 5/21) and noticed that the balance was due on 5/22. (For those of you that don’t know, this particular card is a charge card and requires you to pay the full balance off every month to avoid HUGE late fees.)

    So I requested an online payment that posted on 5/22 — exactly on the due date. When I logged in to look at my statement earlier today, I noticed that I had been hit with a fee that was nearly $100! I called in and learned that a restaurant I had eaten at around 5/15 managed to post their $20 transaction on the morning of 5/22 and therefore my payment from the previous night hadn’t actually paid off the full balance.

    At the time, I figured I’d let it go as a “lesson learned” in paying attention to your accounts but decided it was worth a few minutes to actually call in and explain my case.

    I picked up the phone, explained the situation politely, asked that the fee be refunded because my account had always been in good standing, paused for 30 seconds as they processed the refund and then wished me a great day. Total time spent was about 5 minutes from the time I picked up the phone and I’m glad I did it.

    Lesson: Don’t be afraid to ask for the refund if you can show that it was an honest mistake — the worst they can possibly say is no.

  8. I am very shy and HATE negotiating stuff like this. I am much more likely to let people walk all over me. However, reading this helped me get the courage to call up my bank and ask them to waive a recent insufficient funds fee (paid a bill from the wrong account). She did it immediately, no questions asked. That felt awesome!!!

  9. This horror story is called “Honour Fees” in Australia. I come from The Netherlands originally and I don’t want to brag, but ‘we’ don’t have overdraw fees at all, because every bank will give you a credit of a 1000 or more euros on your normal everyday account, so you can go into the red with very acceptable interest if it’s necessary to use.

    Anyway, I came to Australia opened an account with ANZ, deposited some money in it and because nobody told me or could not be found in their basic ‘reading material’ I thought that as soon as my money ran out I would not be able to take out any more.

    Thought wrong – I went on a holiday into the country, with no ANZ atms to check my balance, and when I came home I found a letter saying that I was declared an Honour Fee. Don’t you just love that word? It turned out that I had overdrawn 70 dollars and that ANZ ‘happily’ gave out this money to me, but that they wanted it back, with an extra 35 dollar Honour Fee!! That is 50%!!

    I was furious and immediately called up. I explained my case, but still they didnt want to budge (I was talking to a customer services rep who sounded like a machine, he was horrible) Since I was completely new to this whole overdraw idea in the first place, I asked that my account be closed for further overdraws.

    “Of course sir, but do understand that..” And he started listing a litany of exceptions and things for which ANZ couldn’t be held responsible if it did happen. How hard can it be…? To close an account for overdrawing.. Still I had to listen to it for 5 minutes and say “Yes” to 15 different things before he could finally close my account for further overdraws. Or so I thought.

    2 months later I went clothes shopping, big time. I had a rough estimate of what I should have in my account and since I was under the impression that my account couldn’t be overdrawn I just swiped it everywhere. A week later I got 2 letters, one for an honour fee of 35 dollars for overdrawing and one for 35 dollars for overdrawing more than 200 dollars!


    Phone – call – angry. Luckily this time I had a very friendly woman who immediately understood what went wrong and pointed out that the guy before hadn’t actually closed the account and that indeed I was already right the first time to ask for a waiver of the first fee! So at once she closed my account for overdrawing and waived all three fees! Even the one I had paid back!

    Well THAT is customer service! (but I’ll be happy when I’m back in The Netherlands haha)

  10. While many bank fees are ridiculous, I find that they are quite willing to wipe them for a good customer.

    I had a bounced check fee wiped because I stupidly wrote a check out of the wrong account. I simply walked into the bank and asked, and they did it right there on the spot. I didn’t have to do any convincing or anything. Plus, I’d been a customer for ~5 years.