Tips on how to take advantage of your credit cards
Your credit cards may offer hidden benefits and secret perks that you’re not aware of, which go well beyond frequent flyer miles. Some special offers are listed in the fine print of your credit card agreement, but many others aren’t public knowledge at all. These special offers are only available to customers who know exactly what to ask for and how to negotiate. Read on and become part of this small, and very knowledgeable group. Your credit report, and credit score, thank you. Happy shopping!
Get an immediate credit limit increase. Though credit providers are less likely to increase your credit limit in the current economic climate than in days past, you can still negotiate a higher balance under the proper conditions. “The biggest trick is to ask for it in conjunction with a large purchase,” says Ken Clark, a certified financial planner and author of The Complete Idiot’s Guide to Getting Out of Debt. This approach will probably only work if you’re a long-term customer in good standing. If you’ve skipped out on several payments in the past, the request is sure to be denied.
In addition to providing you with more credit to spend on large purchases, this can be a good strategy to instantly increase your credit score, too. “30% of your credit score comes from what is called the ‘utilization ratio,’” says Clark, which is calculated by dividing your total outstanding balances by your total possible limits. So, if the credit limit increase is substantial, or if paired with paying down your existing balances, it can have a significant effect on your credit score in a relatively short amount of time. Improving your credit score is always good news!
Delay a payment or waive a late fee. Good credit customers are rewarded, in more ways than excellent credit scores. Temporarily overextended? Paid a little late? Simply call your provider and explain the circumstances, you may be surprised by how accommodating they are. Keep in mind that this request will probably only work once, so be careful about paying on time in the future. Most of the time they also won’t report the payment as late, so your credit report and credit score will not be affected.
Negotiate a lower interest rate. Paying less interest means you may be able to pay more principle, which looks good on your credit report. Simply call the credit card company with another offer at hand, and negotiate a better rate. Be polite, and tell your credit card company that you’ve enjoyed using their service, but you’ve found a better value option. Chances are your credit card provider doesn’t want to lose your business, so you can leverage another provider’s offer to reduce your interest rate, matching or even beating the competitor’s offer. Keep in mind, opening new credit and the length of history for your existing sources will have an impact on both your credit report and credit score.
Get merchant surcharges for credit card transactions removed. With the exception of schools and government offices, it’s generally illegal for merchants to charge an additional fee for credit card users, regardless of the purchase price. When making your purchase, tell the store manager to waive the surcharge. If your credit card statement still shows an additional merchant fee, you can report the incident to your credit card company as a violation according to the instructions listed in their Merchant Abuse Policy, and the fee will be removed.
Double your warranty on new purchases. When you make an expensive purchase like a new computer or refrigerator, there’s no need to buy the extended warranty that you’ll be offered at the store. As long as you use a major credit card to make the purchase, “your provider will automatically match the warranty up to a year on new purchases,” says Clark. Review your terms of service to make sure!
Take advantage of your card’s free car rental insurance coverage. Many cards offer free protection against damage on rental cars, so call your card provider to find out if you’re eligible. Again, review your terms of service to confirm this is true!
Get discounted stays or complimentary upgrades at hotels, discounted meals at restaurants across the United States, and other travel perks. Major credit card providers offer many little-known discounts and upgrades on food and travel expenses that are each worth hundreds of dollars. Pull out your original welcome packet, or log onto the card issuer’s Web site for specific deals and offers.
Some cards, including American Express Gold, provide Best Value Guarantee (BVG) protection on new purchases made with the card. If you see a print advertisement listing an eligible item for a lower price, send the company your receipt and a copy of the ad to receive a refund of up to $250 against your original purchase price.