Negotiating a lower rate for your monthly bills could put thousands back in your pocket each year. That's a big win for many Americans, since nearly 25% say that paying for basic necessities such as rent, utilities and food have plunged them deep into credit card debt. Collectively, Americans owe more than $1 trillion on credit cards alone.
Reducing expenses on monthly bills is one way to counteract this debt. Unfortunately, most people don't know they can vie for better rates, and if they do, the odds are stacked against them if they don't know precisely the right questions to ask.
While it's often said that everything is negotiable, there are some budget-busting bills that take precedent, such as cable, internet and TV, satellite TV and radio, home security, car insurance, newspaper subscriptions and gym memberships.
According to Ben Kurland, co-founder of Nashville-based BillFixers, a company that negotiates with providers to help consumers and small businesses lower their monthly bills, these types of companies expect customers will negotiate. "They base their pricing off the premise that they are going to charge a really high rate and that you are going to call and negotiate it down, but a lot of people don't realize that's how it works, so they end up paying that really inflated rate," he says.
Launched in 2014, BillFixers has helped around 25,000 consumers and small businesses, saving them a total of $5 million collectively, claims Kurland. On average, they are able to save clients 20% to 25% on each bill.
Kurland started the business with his brother Julian after negotiating bills as a hobby for family and friends while Ben was in college studying graphic design and his brother was in law school.
"We are both very cheap naturally," said Ben. "We were negotiating our own bills, and we realized we had all these friends and family who were getting taken advantage of and overcharged but they didn't have the time or the patience to deal with waiting for hours on hold and getting hung up on and getting lied to."
Word about their skills spread so quickly, the brothers decided to turn to it full time. They now have 14 employees. Ben shared with CNBC his fail-safe method for getting the best rates.
1. Do your research. "If you know what the prices are of the competitors in the area, you can come better armed when you negotiate," says Ben. "So if the rep tells you that you already have the absolute lowest rate, you can say you found a competitor online for $30 less."
2. Call between 9 a.m. and 5 p.m. "People are used to calling their cable or internet provider after hours or on weekends when they have free time, but that's when everyone else is calling.," says Ben. He suggests calling during regular business hours when the reps aren't as overwhelmed and your hold time is minimal.
3. Say you are canceling your service. Telling the automated system that you are canceling your service will immediately take you to the retention or loyalty department, and those are the best people to negotiate with, says Ben. "Retention or loyalty departments tend to have access to some of the best discounts. If you speak to somebody in customer service or in billing or in technical support, they have really limited access to the discounts and promotions that are available . But if you go through the process like you're canceling, those people have all sorts of special deals and they will try to entice you to stay," he says.
One pitfall he says to avoid, however, is getting talked into additional services under the pretense that it will save you money. "Every cable company wants to sell you on additional services. The most common ploy is that you'll call and ask for a lower rate and they will say if you add a landline, you will lower your bill. That's almost never worthwhile." Ben says there are two problems with that. "One is cable companies will always tell you the prices before taxes and fees, but services like TV come with as much as $30 of taxes and fees that you wouldn't have with an internet-only bill. The other problem is that after a year, when your promotion expires, instead of $79.99 a month, you are going to $129 a month of TV and internet services."
3. Always be friendly. "It really is true that you catch more flies with honey than vinegar," says Ben. "The reps for these companies basically have total control which discounts and promotions they are going to offer you, so if you are one of the people who calls up and screams at them and throws a fit, they are going to say, 'I'm sorry, but there's nothing we can do.'" Instead, he says, start by asking them about their day and having a friendly conversation. This will usually compel them to go out of their way to find a special promotion that might apply to your account.
4. Be skeptical. "Reps, in general, tend to make a lot of mistakes when you are negotiating your own bill, and they will also flat-out lie to you. So when you get told there's nothing better they can do, it's worth your while to call back and try again. Even if you get told there are savings, it's very common for someone to get their next bill and find absolutely nothing has changed." Ben suggests that after you call and negotiate a bill, call a second time and speak to someone different to make sure they tell you all the same details. "Then you don't have to wait a full month to find out you didn't save any money," he said.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.