Credit card companies have all kinds of tricks and fees to gouge your wallet. Although these seem unfair, they are legal and within the rights of your cardholder agreement, leaving you with only one alternative: Build your own set of credit card tricks so you save money and maintain an amazing credit score.
1. Make Automated Payments
It’s stupid to only make the minimum payment each month. We know that. But sometimes our paycheck doesn’t match our credit card billing date. So rather than pay late and rack up a penalty fee or higher interest rate, sign up online to make an automated minimum payment. Registering through the card company means you won’t miss a payment, and then when your paycheck comes in you can make a second payment to knock more off your balance. You’ll still have accrued some interest, but that’s better than paying unnecessary fees or messing up your rate.
2. Change Your Payment Date
Along this same line of thinking, if you’ve been a loyal credit card user, you can call the company and ask for them to move your billing date. If you’re polite and explain why, they may go along with it. If not, and you really need to get it change, ask to speak with someone about canceling the card. These companies don’t want to lose your business, and will do whatever it takes to make you happy; you may just need to find the right person who can make it happen.
3. Stay Under Half Your Limit
Over-the-limit fees usually exceed $35, and they usually come about because of silly errors or unknown accidents. For example, say you have automatic phone bill payment. You know it comes in every month, but you’ve forgotten that credit card annual fee charge, or that there’s added interest on the Christmas present shopping you did. Suddenly you’re over your credit limit and being charged. Making matters worse, some card companies even lower your credit limit in hopes that you’ll make one of those mistakes and they can charge you the fee. Yes, the credit card company must notify you of such a change– and they usually do in your monthly bill, but few people actually read those statements so they’re easily caught.
The solution? Stay under half your limit. It’s a challenge but it can avoid this fee, allow for a better credit score, and help keep your spending in check.
4. Don’t “Sock-Drawer” Cards You Don’t Use
In an article on CreditCards.com, writer Jay MacDonald advises not to “sock-drawer” or “tuck [cards] in the back of the sock drawer and forget them.” Charging small costs to these credit cards and then paying them off each month can actually help your credit if you have a marginal score.
5. Pay in Full — Including Your Residual Interest
If you’ve been carrying a balance on your card, closing that account does not mean your residual interest is also paid off. Interest accrues between the time the bill was issued and the payment was received, so make sure you pay that residual interest in order to guarantee the balance is truly paid in full. If necessary, call the company and ask for the very last statement to prove you paid it all off.
6. Lower Your “Fixed” Interest Rate
“Fixed rates” on a credit card aren’t what they seem. Usually that term means you have to be notified 15 days before your rate is raised, it doesn’t necessarily mean the rate stays constant. But, since we don’t always read the statements those credit card companies send us, we can accidentally get looped into paying a largest interest rate. If you’re going to carry a balance, check often to see what your current interest rate it. You can also call the company and ask for a lower rate. If they don’t give you what you’re looking for, you can always cancel and get a new card.
7. Don’t Take Cash Out
Read the fine print on your statement and you’ll see it’s a very bad idea. Your card might have a really low rate for purchases, but if you take out a cash advance, there is no grace period and interest rates are higher. You’ll probably pay a hefty service fee for it as well.