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7 Things Your Credit Card Company Hopes You Never Find Out

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It’s not that your credit card company deliberately wants to keep you in the dark. Hmmm…okay, maybe some do! But most major banks are pretty good about disclosing terms and conditions on credit cards. The tips I’m talking about here fall into the “I didn’t know that!” category—that you can, indeed, negotiate with your credit card company.

If you’ve had problems making payments on time or have had other issues being a responsible cardholder, though, you might not want to initiate contact with your card issuer because it can backfire (see #7). So that’s my “don’t try this at home” warning for those whose records can’t pass scrutiny.

#1: You’re The Boss

The card issuers work for you, not the other way around. You have more power than you know. Really, you do. And the higher your credit score, the more power you have.

How high does it have to be? At least 700 to wield a moderate amount of power. Over 750, and you’re in a sweet bargaining position. It’s easy to fall into a trap of complaining about how you’re being treated. But if you don’t like something, take action. This might mean “firing” your credit card issuer or just having a serious talk with someone about your concerns.

But even if your credit score suffered in wake of the Great Recession, you’re still in command. You don’t have as much negotiating power as those with excellent credit do, for sure. But you’re still in charge of your credit life and you’re the one who will choose how to get your credit back on track.

#2: You Can Lower Your Current Interest Rate

You know what tactic works well here? Flirting with the competition. Let’s say you get an offer in the mail for a good-looking credit card that has a lower interest rate than the card you currently have. Call your current issuer and be your nicest, most cordial self. Tell the customer service rep that you’re considering getting this new credit card so you can have a lower interest rate.

If there are any other features the new card offers, such as no baggage fees, then mention those, too. Say that you’d really prefer to stay put since you’ve been such a loyal customer for so long. If you’ve been a stand-up customer, you have a chance of making this work.

If you don’t get anywhere with the service rep, ask to speak with a supervisor. And through all of it, be polite and don’t get frustrated. Even if you don’t succeed on the first try, make a note of the supervisor’s name. Be the best-ever cardholder for six months and then try again.

#3: You Can Play Hard To Get Before You Apply For A New Card

You’ll need a little bit of confidence to pull this off. It also helps if you’ve had acting lessons because no matter how much you want the card, you act indifferent. Your attitude is: What will you offer me to get my business?

The card issuer needs you more than you need them, and that’s why this tactic can work. Again, having competitive offers in hand helps give you the necessary clout. You explain that you’d like to become a cardholder, but you’re looking at an offer from a competitor and this other card doesn’t have an annual fee. Or maybe the other card has a lower interest rate. Ask your would-be issuer if they can waive the annual fee or beat the competitor’s interest rate.

#4: You Don’t Actually Get 45 Days’ Notice When Your Bank Decides To Raise Your Interest Rate

According to the CARD Act, the issuer does have to give you 45 days’ notice when your interest rate is being increased. That just means that you have 45 days before you have to pay the higher rate. You actually start accruing interest at the higher rate on any purchases you make 14 days after the notice was mailed. So on the 15th day after the notice is mailed, you start paying a higher interest rate on new purchases.

Legally, credit card issuers aren’t doing anything wrong. But don’t you suspect a few of them are counting on consumers to be unaware of this loophole in the CARD Act? As soon as you get the notice in the mail, look at the postmark date so you know when the new rate takes affect.

#5: You Can Get A Late Fee Removed

Many issuers say they don’t report a good customer if they’re slightly late just one time. But don’t take chances. As mentioned above in #2, call the issuer and be really polite while you tell the story of why you’re late this one time.

In the South, we have a saying that you can catch more flies with honey than with vinegar. I’ve never understood why you’d ever want to catch more flies (the imagery alone is kind of disgusting), but the basic principle is valid. If you don’t have a past history of tardiness, you have a good chance of pulling this off.

#6: You Can Eliminate—Or At Least Decrease—An Annual Fee

This tactic is usually presented as an all-or-nothing thing. Try to get the whole fee waived, but if it looks like you can’t make it happen, ask to have half the fee waived. I know a few people who have succeeded at getting a 50 percent fee cut. You can also plan ahead and say something like, “How about a 50 percent cut for the next two years?”

See? You’re in charge. You don’t always get what you want, but if you aim high, you can end up in a better place than you were in when you started.

#7: You Can Ask To Have Your Credit Limit Raised

I know an attorney who called a major issuer and asked to get his credit limit raised. The customer service rep took a look at his payment history and balance.

The rep said, “Sorry, sir, but given your high balance and payment history, we need to reduce your credit limit.” This not only infuriated him, but it also lowered his credit score because his utilization ratio went up.

When you contact the issuer, give a few reasons why you’re worthy of an increase (e.g., you have stable employment and just got a raise, never made a late payment). Whatever you do, don’t sound needy. This is another tactic when acting lessons might pay off.

Image: maximolly, via Flickr.com

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  • Maria Malave

    I owe about $40,000.00 in credit cards. My credit score is around 691. I am paying them and have never been late in any payments. I own a home with my husband, who pays the mortgage and the car we have a loan as a joint. He pays for the food and everything else in our household. I only pay for my credit cards. I am currently working less than 30 hours and trying to work on 40 hour week. I’m not sure if i should file bankruptcy, or just pay what i can on these cards. Your great advise is greatly appreciated.

    • http://daveramsey.com Shannon Stone

      Visit daveramsey.com. He’ll help you figure out what to do.

      • Danielle

        Dave Ramsey is the way to go! I had 2 car loans thousands in credit card debt and a student loan…that was about a year ago…I have paid ALL of it off other than my student loan thanks to dave ramsey and his wonderful book Total Money Makeover!

    • Gary

      File BK. Doing it any other way is stupid, regardless of what any “expert” may tell you. I suspect your credit is already bad, so what is the downside? What they don’t tell you is that if you have a $0.00 balance card, you do not have to include it in the BK. We did it and never had a problem. Just be sure not to charge on it for the 3 months it takes to get through the system and wait until you have the final BK judgement in hand before attempting to use it. You’ll still have credit for an emergency. Also, when you file BK plan on about 3-4 months before you see any real difference in your life. It takes about that long for your income to begin catching up.

    • Beverly Harzog

      Maria–It’s awesome that you’ve never been late with a payment. I urge you to contact the National Foundation for Credit Counseling, http://www.nfcc.org. This is a non-profit organization and they’ll help you find a counselor in your area. A credit counselor can help you decide what the best plan of action is for your specific situation. I wish you the best as you work your way through this. Hang in there!

    • Dennis

      Maria: Bankruptcy is a LAST resort only. If you are staying current, do not use that tool. I’ve had to use bankruptcy as a legal manuver, so I know more about it than most. Do this instead: 1. Do not charge anything more on any of your cards. 2. Find more than your minimum payments each month, and apply the extra money to your lowest balance card (if all balances are about the same, apply it to your highest interest account). 3. When that account is down to zero balance, use the money you were paying there to add to the payments to the highest interest/lowest balance account left. When you have all of your credit balances to zero, and think that you want to use credit again, FOLLOW THIS RULE: NEVER CHARGE IT ON A CREDIT CARD UNLESS YOU ALREADY HAVE THE CASH TO PAY THE BILL BEFORE IT IS DUE IN FULL.

      For all of the rest of you: Sign up for on line access to your cridit card accounts. Ues a different username and a different password for each one. Check all of them at least twice a month and pay the total billed balance on line as soon as you find it is not zero immediately. Don’t let delayed mail mess you over. Keep a separate checking account just for card paying online, and fund it whenever a credit card payment is to be made, but never let the balance in that account go below the bank’s minimum to avoid service charges. If all of this is too much trouble, you are not a candidate for using credit cards.

  • michael

    easy to get and use plastic;hard to pay up. I figure balances divided by 48 months and limit balances to total of what I can pay each month. so,some months I cannot use any plastic. what a bummer,but less stress and probably a smaller waistline? takes some figuring and discipline,but learn to use the calculator and keep a logbook.could save you from a divorce,an empty refrigerator,inability to pay your rent/mortgage or car payment.think of the plastic as a war where the banks,etc are out to get all your money and prevention is the best option,but I do need my wine or beer at least every so often?

  • Paula

    Dont file for bankruptcy. Your credit cards are unsecured debts and the credit card companies can’t do anything to you if you are delinquent. Your cars and home should come first.

  • Robert D

    This is interesting reading. Part of #4 states:
    “As soon as you get the notice in the mail, look at the postmark date so you know when the new rate takes affect.”
    My experience has been that some credit card companies use first class bulk mail which will NOT have a postmark. The USPS doesn’t even put any markings on it in their system. Some credit card companies are worse than others. HSBC is terrible with this issue but BoA has never been a problem for me. I have, at times, received the HSBC bill a week after it was due (3 and 1/2 weeks after the statement ending date). Called customer service and got no where. Told they are not responsible for lost or misdirected mail. Went to USPS and was told that since there was no postal marks they were not responsible (it was suggested that the credit card company didn’t send it in a timely manner). Looking online I found this is not an isolated incidence and not with just one company. Putting together information I have found that with a mailed bill there is a greater incidence of late/misdelivered/lost statements from companies and banks that use smaller envelopes or a larger square shaped envelope. These fit USPS standards but are the most likely to cause delivery problems. My bank used to use a larger statment envelope and 2 to 4 time a year I would not receive a monthly statement. Since it didn’t happen 3 months in a row it wasn’t considered a consistant problem. I finally got help when a bank rep and I found that there is now a red flag rule for missing statements/bills that must be addressed and they tried changing envelope size to a #10 envelope and found a 90% drop in missing and returned statements. They saved a lot of money in resending or printing statements for customers which paid for the switch to something more reliable for delivery.
    Personally I believe that some companies know this is an issue but use the 1st class bulk mail with a smaller envelope because it is really cheap for them but doesn’t provide a reliable customer service in the delivery which is what it should be about. So if a postmark isn’t provided that means you must call customer service to get the information and sometimes that is information that CS just doesn’t know for some reason.

    • ABI A

      I am very sorry to say but, I think you should file for bankcrupty but, do not include your home or cars. Also, if you have some creditcard with your primary bank do not include these account, because they will always assist you when in trouble, if you do not cause them a loss. You will also get the collections agencies off your back. Good luck.

    • Beverly Harzog

      Robert–You bring up an interesting point. Thanks for your comment! And I agree that calling customer service is the best thing to do in this situation.

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  • Rebecca Ramer

    Ok I have a question. I had a husband who died 2008. Way before he was even sick he ruined both of our credits so that even now in 2012 I can’t get a credit card as an emergency card in case I break down somewhere or something. I worked for a long time trying to straighten things out at that time but gave up when he became so sick that we were having to physically take care of him. Since I took over the bills I straighted alot out but even with him tone there’s things that he did behind my back that I didn’t even know about. I only purchase things when I have the money to do so. How do you fix something like that?

  • eva

    Many of the points made in the article are moot, because people who have excellent credit scores live within their means; they don’t pay interest to begin with and they don’t need higher limits or more cards.

  • Jesus

    My credit score is 740. I just got two new credit cards and I ‘m not paying interest on them till next year. My problem is that I have one credit card that I have for more than 5 years, I called the bank to raise the credit limit and I asked them if when they do it this will appear on my credit report as a hard enquiry and they told me yes!, so what is the point of calling the bank to raise my credit limit if when they do it my score is going to drop?

  • Nikato Muirhead

    Whatever you do, DONT file bankruptcy, also Don’t close your very oldest credit card, even if it has some bad history. Age and loyalty to the oldest card matter ALOT!!! . That is unforgivable. bankruptcy closes all of your credit cards, including the beloved oldest card.

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