How to Negotiate a Lower Bill

How to Negotiate a Lower Bill

Now THAT’S a bill! (Photo courtesy of Steve Wilson)

One of the ways I’ve saved money over the years is through successfully negotiating my monthly bills. It’s a tactic I love because you can spend the time to do it right once and then reap the benefits month after month. I’ve been able to negotiate a lower bill for cable, satellite, cell phones, internet, even life insurance (though that was mostly my wife).

This isn’t a unique idea. I’m also not particularly skilled at it. But I was able to do it again just last week with my gas bill and I thought there were a few lessons worth sharing.


National Grid provides the gas that heats our apartment. Though our gas usage fluctuates each month, mostly depending on the weather and therefore how much we need to heat the apartment, we participate in their balanced billing program that allows us to pay the same amount every month. The goal is to smooth out the monthly payments so that you’re able to pay the full amount you owe over 12 months, but do it in relatively consistent amounts.

Every few months they re-evaluate your usage to ensure that your monthly payment is still in line with what you’re actually using. For a variety of reasons we used a lot of gas over the first few months of the year, and after their most recent evaluation National Grid decided to increase our monthly payment from $90 to $151. That’s a 68% increase! Needless to say I was not incredibly excited about this, and I also didn’t think it accurately reflected our usage over the past 12 months. So I called them up to see what I could do about it.

Be polite and patient

The first rule of negotiating your bills? Be polite. The second rule? Don’t forget rule number one. And the third rule? Your patience will be tested. Deal with it.

When I called National Grid, I was led through a series of automated menus. Whenever I get to one of these things, I immediately press 0 hoping that it will take me directly to a person. No such luck this time. So I went down their rat-hole of menus that led me nowhere near the thing I actually needed, until I finally got to a point where I could talk to a person. Patience tested #1.

When a real human finally picked up, it was tempting to say something snarky about how long it took. Instead, I started with “Hi, how are you?” in the most pleasant voice I had. She asked for my name, my account number and my address, pulled up my information, and asked why I was calling. I described my wish to discuss my monthly payment, and she immediately responded that I needed to be talking to another department. So I was transferred. Patience tested #2.

After a few minutes of waiting, a new person picked up the line. Again I started with “Hi, how are you?” in my nicest voice. Again I was asked for my name, my account number and my address. (On a side note, I will never understand why there isn’t a technology that prevents you from having to repeat this kind of information every time your call is transferred within an organization. How have they not figured this out yet? Patience tested #3.) Despite the frustration of having to repeat all of this again, as well as repeat my reasons for calling, I did all of it in a pleasant, gracious manner (at least that’s how it sounded in my head).

The point here is that in all likelihood when you’re calling to negotiate a bill, or even just to ask a question about it, you will likely have to go through several people and/or computers before you get to the person who can actually help you. If you’re not patient and can’t remain polite, the chances of the situation being resolved in your favor are very small. Remember that you want these people to help you. Simply being nice and showing some appreciation for their work will go a long way towards making that happen.

Keep good records

When we finally got into the details of my request, I was ready. Because I’m a huge nerd, I actually record our gas usage and the associated charges each month. So I actually know that our true average charge over the last 12 months has been $113, not $151, and I was able to use this in our negotiation.

If I hadn’t kept good records, I would have been left with two options. I could have gone back through all my old bills, assuming I had them, and done the calculations then and there. Certainly a viable option, but being that I’m naturally fairly lazy I have to be honest that it might not have happened. The other option was to try to appeal on emotions. After all, without facts, what else would I have had? Needless to say, I don’t think that would have been a successful tactic.

As soon as I told this woman that I had tracked our average usage over the last 12 months and wanted to use that as our monthly payment, she was pretty much puddy in my hands. Knowledge is power my friends.

Be persistent

Despite my incessant charm and my army of facts, she still tried to negotiate with me. Her main argument was that if they lowered my monthly payment, I might end up owning them a settlement amount at the end of the year if my usage was actually more than what I had paid. Not a terrible point if I didn’t have cash on hand to pay that kind of settlement. But I do. And besides, would I rather end the year owing them money or having them owe me money? I don’t know about you, but I would much rather not have to deal with trying to collect the amount I overpaid them.

At the end of it, I was able to negotiate a $115 monthly payment, almost exactly the same as the $113 we’ve actually been using and a large discount from the $151 they wanted to charge us. Despite all of her counterarguments, I stuck to my guns and got what I wanted.


Not all of my negotiations have been as successful as this one. But every time they have worked it’s been because I followed the tenets above. In the end, these companies want to keep you as a customer and are willing to work with you as long as you are courteous, knowledgeable and have a reasonable request. Taking the time to negotiate the right way can result in big savings with minimal ongoing effort. Just the way I like it.

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45 Comments... Read them below or add one of your own
  • Alexa Mason July 24, 2013

    I had a horrible experience trying to negotiate with Directv. I can usually make my point and get somewhere with companies, but not Directv. They would always tell me to call back in a month and I would they never lowered my bill. After I had them for a year by bill doubled and they wouldn’t do anything for me. Needless to say, I cancelled.

    • Matt @ momanddadmoney July 24, 2013

      I’ve been frustrated with DirectTV too, because of the exact same rate doubling you talked about. I was able to get them to lower my bill by $20 after that though, which erased half of the raise. I’m surprised you got all the way to actually cancelling without them doing anything. Oh well, their loss.

      • JoeM January 27, 2014

        Unless I am misunderstanding something, Direct TV does not rate double. Their offer gives you programming at 50% off in year 1 of an agreement and returns to normal in year 2. Once that commitment is complete, I have found DTV to be one of the most cooperative companies to negotiate with for reduced rates and equipment upgrades.

        • Matt @ momanddadmoney January 27, 2014

          For me personally, when I initially signed up I was told that my rate would be stable for the entire 2 year contract. That proved to be false. I’m sure other people are told other things and it sounds like you were given a more accurate picture, which is great.

          As I said in the comment above, I was able to negotiate $20 off that higher bill, meaning they only ended up increasing it by 50%. Still, it was hard to trust them after that. Eventually we just decided we didn’t need cable anymore.

  • Michelle July 24, 2013

    I need to go through and try negotiating some of my bills again. I last negotiated with DishTV, and I do this every 6 months so that I can get free HBO and like $10 off my monthly bill. It is a savings of about $25 per month!

    • Matt @ momanddadmoney July 24, 2013

      It’s definitely an ongoing process. But the rewards can be pretty good. I would love some free HBO. That’s usually what they offer me instead of a price decrease and I always decline.

  • Edward - Entry Level Dilemma July 24, 2013

    I’m still a little bitter about the fact that the phone company is refusing to negotiate on my DSL package. I was willing to take another contract to keep my bill at it’s original price or at least cheaper than the 30% it increased last month. When I threatened to leave for Cable, they basically told me “good luck.”

    • Matt @ momanddadmoney July 24, 2013

      I’ve had good luck with cable, to a point. There’s only so much they’ll do, but I’m sure it also depends on the company. I hate it when your only choice is to face the extra cost, cancel and face the cancellation fee, or re-up the contract at a reduced price. Sounds like that’s where you’re stuck with the DSL. Negotiating certainly isn’t a guaranteed success.

  • DC @ Young Adult Money July 24, 2013

    This has worked for me in the past with lowering our cable bill. Which reminds me – I need to call them again sometime next week and try to get it lowered again!

  • cashRebel July 24, 2013

    Way to go! I was able to do this with internet the other day and I felt like a champ. My rule of thumb is treat them like your grandma and everything will go smoothly.
    On another note, since you are financially stable, id advise against the flat rate gas deal. You a paying a premium for a flat rate (unless budget certainty is more important to you).

    • Matt @ momanddadmoney July 24, 2013

      Thanks for the warning, but I actually don’t pay any extra with the balanced billing program. I verified this with them again just to make sure, but that’s definitely a good thing to watch out for.

  • Rita P July 24, 2013

    Very good post, I never though that we can negotiate a lot but when one of friend taught me this skill, I have been using it for good

  • Grayson @ Debt Roundup July 24, 2013

    Great post Matt. I think that you can really lower your bills if you approach the situation in a polite manner. I have gotten quite a few reductions in bills by just asking nicely and providing some facts to back up my position. Thank you for linking to my encouragement post. I appreciate it!

  • BrokeMillennial July 24, 2013

    Well said, Matt. Being polite to anyone in a customer service oriented field can do wonders! However, sometimes you have to know when to play a little dirty. After going through all the channels you can and staying polite, a well placed Tweet can also do a lot for negotiating power. I’m currently battling my internet provider for keeping our original rate, so hopefully your post can guide me through! My backup is to just claim I’m moving and have my roommate put the bill in her name so we can secure the “first time user” rate.

    • Matt @ momanddadmoney July 24, 2013

      The twitter move is a good one! I’ll have to try that out if I get stuck in the future.

  • Andrew July 24, 2013

    I negotiated a lower fee for my cellphone bill and cable internet bill. It seems to be that the magic words are “I’m thinking of cancelling” or with my cellphone bill where the contract was up, I said “I think I’ll switch to a cheaper company.” With the cellphone company, I was very nice and polite, but could not get a lower rate until I said that I was cancelling and they transferred me to the retentions department. Apparently the reps there have more leeway to give you discounts.

    • Matt @ momanddadmoney July 24, 2013

      Yep, “cancel” is the magic word. I forgot to include that here, mostly because I didn’t have to use it in this situation. But that’s definitely a tactic that’s been successful for me in the past. Thanks for adding that point.

  • Well done! I have the same for electricity but it is based on real consumption from the past period. If you pay $20 a month, and the last 6 months you spent $150, the extra $30 you owe are spread over the next 6 months, plus $150/6. It seems fair because they do it mid season so they don’t get only the coldest months (UK property).

    • Matt @ momanddadmoney July 25, 2013

      Mine gets evaluated every 4 months, which is why they jacked it up so high. Anyways, I like the balanced billing approach as long as you’re not charged extra for it.

  • E.M. July 24, 2013

    I am glad you were able to negotiate with them! My mom had a similar plan where she was on a “budget.” I definitely would have called them up as well – that is a big increase. I hate how you usually get asked for your information by the automated response first, too. Why does the computer bother asking in the first place if the next person is just going to ask again? I had that happen to me when I was calling my health insurance company.

    While I may get angry at all the transferring back and forth just to finally speak with the correct person, I have to remember they are actual people and it’s probably not their fault their company is inefficient. I wouldn’t appreciate being blown up at if I were them, so I am always civil.

    • Matt @ momanddadmoney July 25, 2013

      Yeah I really don’t understand the whole repeating information thing. It seems like it should be pretty simple to figure out. Anyways, you make a great point that the people you’re talking to are not responsible for whatever situation you’re in. I remind myself of that every single time I call for something like this. I often even explicitly say that to them, that I understand that they had nothing to do with this but I’d like to know how they can help. That can help soften them up.

  • Done by Forty July 24, 2013

    Good article — negotiation can help and I do think being pleasant and respectful gets you a long way with most customer service reps.

    We’ve been able to negotiate lower bills with DirecTV, our internet company, and prior to switching to PTel, AT&T. But I’ve yet to have success with our utility companies. I think they know they have a captive negotiator — I don’t have the option of really packing up and switching to another provider, and they know it. 🙂

    • Matt @ momanddadmoney July 25, 2013

      I think I might have been a little lucky here. You’re absolutely right that I didn’t really have another option if they didn’t want to negotiate. I guess that just reflects well on them as an organization!

  • Budget & the Beach July 24, 2013

    Nice job! I hate having to repeat the same thing over and over as well. Maybe you could record your voice next time and play it back, and have something like, “if you want to hear the explanation again, press 1…” 🙂

  • Kim@Eyesonthedollar July 24, 2013

    I’ve tried to negotiate almost every bill we currently have. Sometimes it works and sometimes it doesn’t. You’ll never get any discounts if you don’t ask, so I think the frustration is absolutely worth it if you do end up getting bills lowered sometimes.

    • Matt @ momanddadmoney July 25, 2013

      Exactly. You never get what you don’t ask for. Doesn’t always work, but I definitely think it’s worth it for the times it does.

  • Laurie @thefrugalfarmer July 25, 2013

    Matt, I’ve been tempted to try this with our phone/Internet service, but they’re the only provider in this area, so if I cancelled we’d be stuck with nothing. Any suggestions? I don’t want to play the “I’ll cancel” game, because I wouldn’t. 🙂

    • Matt @ momanddadmoney July 25, 2013

      Are you sure they’re the only provider in the area? Sometimes there are smaller companies that just don’t really advertise. But even if they are, could you threaten just going without the service? I did that once with cable. I just told them I’d be fine without it. They won’t cancel you without you verifying it several times, so you can get pretty far with that without actually doing it. And the worst that happens is that they’re ready to cancel and you just say “never mind”. Gotta swallow your pride a little on that one, but no harm done.

      • Laurie @thefrugalfarmer July 25, 2013

        LOL, yeah, I could pull a bluff I guess. Yeah, from what I understand, they’re the only provider. It’s a rural area, so I think that’s why the choices are slim out here in the boondocks. 🙂

        • Matt @ momanddadmoney July 25, 2013

          It’s worth a shot. It really has worked for me once before. It might not for you, but it can’t hurt.

  • Your Daily Finance July 25, 2013

    In my case just hand the phone over to wifey and let her deal with it. She is good at getting the facts and pinning people down plus she is a people person and people seem to want to lower the bill or change things.

  • Tie the Money Knot July 26, 2013

    It rarely hurts to try. Have to say, there is more negotiating room than meets the eye in many cases. Not all, as some bills won’t be lowered. But some can – sometimes medical bills as an example.

    • Matt @ momanddadmoney July 26, 2013

      I’ve never negotiated a medical bill before, though I’ve certainly heard of people doing it to avoid it going into collections.

  • femmefrugality July 27, 2013

    Oohhh I totally do this. It’s amazing how much you can save! I keep good records, too, but I’m paranoid in a ridiculous fashion about internet bills and 1984 so they’re all paper. I need to get rid of some old ones; they can take over your life. (Sorry I’m not super green…I try to compensate in other ways.)

    • Matt @ momanddadmoney July 29, 2013

      Haha, well I’m not the greenest person in the world either so you’ve come to the right place. I do like to keep stuff online though. Much easier for me to manage.

  • Greg July 28, 2013

    Nice work. I love negotiations. We just had our internet bill go up. So, we went through the regular song and dance of threatening to cancel and then getting our introductory rate extended for another year.

    • Matt @ momanddadmoney July 29, 2013

      Haha, yeah it can get a little repetitive. As long as it works though, I’ll keep doing it.

  • Matt @ momanddadmoney August 5, 2013

    Your internet provider can be a good place to use this for sure, just like with cable and cell phone. Any bill where you have other options is ripe for negotiation.

  • Colby Harder March 9, 2014

    Matt, you didn’t lower the amount you owe to the utility company. At the end of each year, the utility company will determine actual usage, and charge you the amount that wasn’t covered by the lowered monthly payment.

    • Matt @ momanddadmoney March 10, 2014

      Very true. In the long-term my costs will be the same. But in the short-term I avoided overpaying them which kept some of our monthly cash flow available for other things.

      But in the bigger picture, the important thing to note here was how the negotiation was actually done. The same techniques could be used on any bill, many of which actually would lower the long-term costs. That’s the real lesson here.

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