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Being a grownup brings with it some thankless tasks (doing laundry, filing taxes and sitting in traffic are three that come to mind). But paying your monthly utility bills—which can easily cost hundreds of dollars a month—has to be near the top of the list. Ever wish you could keep more of that money in your pocket?
You can, if you know how to negotiate with utility companies and service providers (or have someone else do it for you). Read on to learn how.
What Bills Are Negotiable?
With a little flexibility and patience, just about every monthly bill you have is negotiable. This includes gym memberships, newspaper or magazine subscriptions, home security services, automobile and homeowners insurance, cellphone and internet services, and cable or satellite television.
Utility bills can be negotiable, too, especially if you live in a state that allows energy choice—that is, the option to choose among natural gas and electricity providers. Even if you're limited to one utility company, there may be ways to get lower rates or otherwise reduce your monthly costs.
If you're not sure whether one of your monthly bills is negotiable, it doesn't hurt to ask (and it just might help your bank account). There's not much at stake beyond a few minutes on the phone.
How to Negotiate Your Bills Yourself
Negotiating your bills can pay off in big savings—if you know how to play the game. As with any negotiation, such as buying a car, it pays to do your homework and plan ahead. Understanding the process, what to ask for and what you're willing to accept can help you be more confident and boost your odds of success in your negotiations. Follow these steps to negotiate your bills like a pro:
- Gather your info. Create a list of all your monthly bills, including utilities, services and subscriptions, and how much you pay for each. Anything you pay on a regular basis could be fair game for negotiation.
- Know your worth. Note how long you've been a customer of each service. The longer you've been a customer, the more the provider should be motivated to keep you. The size of your bill may also give you the upper hand in negotiations. A cellphone provider, for example, may do more to please someone with six lines than it would do for someone with just one. Do you always pay on time? Not only does that help build your credit score, but it also makes you a more valuable customer.
- Identify your options. For each monthly service, identify the company's competitors. It's generally easier to negotiate when many companies are vying for your business and harder when choice is limited. The law might limit your options as well—just 13 states and Washington, D.C., currently allow consumers to choose their energy service providers.
- Research rates. Gather details about what's offered by the company you're already with as well as its competitors. Are companies wooing new customers with lower introductory rates, rebates, extra services or other goodies? Write it all down. Based on this information you've gathered, set a goal for the discount you want for each provider and the minimum discount you're willing to settle for.
- Make the call. Set aside at least an hour for each negotiation. You may have to go through several layers of automation and customer service personnel before you get to someone who can help you. Once they're on the phone, you can start to develop a rapport with your customer service rep. As you make your request, try to stay upbeat, polite and friendly. Customer service reps are more likely to help you if you're nice. Approach the call with a confident tone that assumes you and the rep are on the same team.
- Keep it open-ended: Reps can generally offer deals you don't know about, so asking a general question like, "What can you do to help me lower my bill?" can get better results than asking for a specific discount.
- Be patient: Don't give up at the first "no." If the rep you're speaking to says they aren't authorized to change your bill, ask to speak to someone who is—and keep going all the way up the chain.
- Be willing to walk away: If you threaten to cancel your service, be ready to go through with that threat. Even if you don't intend on going through with it, asking to cancel your service usually gets you transferred to the company's customer retention or loyalty department. These reps are highly motivated to keep you on board and empowered to offer discounts to do so.
What to Do if the Utility Says No
What if your service provider says there's no wiggle room? Don't give up. Ask if there are any other options to shrink your monthly bill. These might include:
- Cost-reduction programs and rebates: Utility companies may give you credits or reduced rates in exchange for lowering your energy or water use. For example, Southern California Edison offers Demand Response programs, such as a summer program that gives homeowners credits on their bill if they let the power company cycle their air conditioner off at times of peak demand. You may also be able to get a rebate if you install energy- or water-saving devices such as low-flow showerheads or smart home thermostats.
- Convenience discounts: Some companies will lower your bill if you switch to paperless billing or set up autopay.
- Retention credits: If you can't get an ongoing discount, ask about a one-time credit. For instance, if a competing cellular carrier is offering a $150 credit to new customers, ask your carrier for a $150 credit to stay with them. To the company, the one-time price to keep you as a customer will be worth it in the long run.
- Changing your level of service: You may not be able to lower your bill—but can you get more services for the same amount? Perhaps you can bargain for more data on your cellular plan or more movie channels on cable—all for free. Or, if you really want to lower your bills, you may have to switch to a lower service tier, such as slower internet speeds or a cellphone plan with data limits.
- Signing a contract: Paying for services on a month-to-month, no-commitment basis offers flexibility, but can come at a price. If you know you'll stick with a provider for at least 12 months, you might save money by entering an annual contract.
- Financial assistance: If you're having trouble paying your utility bills, contact your utility provider and see what they can do. Many utilities have assistance programs for low-income consumers that can lower, postpone or even cover your payments long enough to get over a financial setback.
What if you've tried it all, and your bills haven't budged? Try calling back later. You may luck out and get a customer service rep who's more willing to work with you.
When you do succeed in getting a lower bill, celebrate—but first, be sure to confirm the details, including when any promotional offers will expire. When you get next month's bill, review it to verify that your cost actually went down.
Hire a Company to Negotiate Your Utility Bills
Setting aside a few hours to talk to each provider (not to mention hours investigating their competitors' prices) might not be realistic for you. If researching dozens of cellphone plans isn't your idea of a fun Friday evening, consider hiring a company to negotiate for you.
You can find plenty of bill negotiating services and apps by searching online. Be sure to do your homework before working with a service. Read customer reviews and search online to see if there are any lawsuits or complaints against the company.
Most bill negotiators don't charge an upfront fee, but some do charge for membership or a percentage of the savings it's able to negotiate. Make sure you clearly understand the costs of any service you choose before committing to anything. If you have limited time to spend on the phone or if you stand to save a lot of money by negotiating, the cost may be worth it.
Negotiate Your Way to Utility Bill Savings
As you review your utility and cellphone bills, you may want to take advantage of a new way to use on-time payments to improve your credit. Experian Boost™† is a free service that uses your positive utility and telecom payment history to help increase your credit score. If you always pay these bills on time, why not benefit from it?
Negotiating your utility bills is a little-known tactic that can pay off big. You may never be able to negotiate your way out of laundry or taxes, but with a little practice, you can negotiate your way to lower monthly bills—and have more money for the things that really matter to you.