Do your credit cards have high interest rates, costly fees, or substandard rewards and benefits? If so, you don’t need to continue to use a card when there are other options available. Here are seven things that you can to to get a better credit card.
1. Ask for a Lower Rate
Many credit cards offer a range of interest rates, and customers are assigned a rate based on their credit when they applied for the card. But if your credit has improved since you opened your account, then you may be eligible for a card with a lower interest rate. To see if you qualify, call your card issuer and ask to have your card’s standard interest rate re-evaluated. (Note: this may result in a hard inquiry on your credit report, which can ding your score — so be sure you can handle a small hit.)
2. Request a Higher Credit Limit
If you need a credit card account with some more spending power, you might be able to have your credit limit increased. Some card issuers allow customers to request a higher credit limit online, while others may need you to speak with a representative. If you have a strong payment record and a low amount of debt, then it will improve your chances of being granted a higher credit limit. (Again, this request may result in a hard inquiry on your credit report, but your score should also benefit from having more available credit at your disposal — so long as you refrain from running up big balances.)
3. Consider Using a Different Type of Card
Imagine you drove a nice little two seat convertible, but then you got married and started a family. In that situation, you might realize that you need a different kind of car to better fit your current needs. Similarly, if you have been using a rewards credit card with a high interest rate, then you might want a different type of card if you now need to carry a balance. Likewise, you might want the benefits of an airline credit card if you are suddenly traveling more often, and don’t need to carry a balance.
4. Shop Around for the Latest Credit Cards
Even if you are using the right type of card for your needs, it may no longer offer the most competitive rates and terms if you’ve had that card for some time. The credit card industry is extremely competitive, and card issuers are constantly introducing new products with greater rewards, improved benefits, and more more competitive rates and fees. So if you haven’t shopped around for a new credit card in a few years, then you need to see what products are currently being offered.
Just be sure to check your credit before applying. The better cards generally require good credit scores, so you’ll want to be sure yours is in the best shape possible before filling out applications. You don’t want to risk a hard inquiry only to get rejected for a card. You can view two of your credit scores for free each month on Credit.com.)
5. Focus on On-Time Payments
If you want to apply for a better credit card than you’ve been able to open in the past, then one of the keys is to improve your credit history and raise your credit score. The most important factor in your credit score is your payment history, so you’ll want to make sure all of your payments are on-time.
6. Reduce Your Outstanding Balances
When it comes to your credit scores, the amount of debt you have is almost as important as your payment history. To improve your credit score and qualify for a better credit card, try to reduce the total amount of your outstanding balances as well as the number of accounts that you currently have a balance with. Then, you will need to wait until your statement period ends so that your new, lower balances will be reported to the major consumer credit bureaus. Only then should you expect to see any improvement in your credit scores related to your debt levels, allowing you to be approved for a better credit card.
7. Ask for Reconsideration
If you’ve applied for a better credit card, but were not approved, you don’t need to take that decision as final. Credit card issuers often use an automated process to approve or decline new applications, but few people are aware that you can request that a representative reconsider your application. So even if you’ve received a rejection letter, be sure to contact the card issuer and ask the representative to take another look. You can also inform the representative of any changes or insight into your application, such as additional income.