Credit card companies don’t give you a how to guide, or inside tricks when you sign up for them. But we’re going to.

Charges and Fees

I always hate being hit with  late fees, even when I’m on top of my budget and due dates, however it happens to the best of us. Whether it be travel, work, family or just life that throws us off our game we sometimes miss a payment and suddenly see a late fee of at least $25. When this happens give your credit card company a call, explain the situation, and ask if there’s anything that can be done to waive the late fee (sadly, I have never gotten them to waive interest gained).

Make sure to emphasize the following points:

  • The excellence of your payment history (always on time, always paid in full, etc.)
  • You have already scheduled the payment of your current bill (possibly in full)
  • This was a fluke

Most credit card companies will waive the late fee, as long as you have been in good standing with the company. Of course, this is not something you can do every month, most companies have a rule only allowing this to happen once every 12 or 18 months. This waiver can also be applicable to unknown foreign transaction fees. If you come back from travel and noticed these fees, reach out to your credit card company and explain your lack of knowledge and ask for a one time waiver as you now know for next time.

Increase Credit Limit

You may be thinking, I don’t want to increase my credit limit because I will spend more, however having a higher credit limit is good for your credit score. When your credit score is calculated, 30% of your credit score is made up from available credit being used. The golden ratio for having a good credit score is ⅓. For example, if you have one credit card with a limit of $500 you only want to have a balance of $166 on that card. If you request an increase on the same credit card and have a new limit of $750 the desired ⅓ balance would increase to $250.

That being said, when is a good time to ask for a credit limit increase?

  • If you have good credit history with the card (paying on time, paying each month, etc.)
  • If you recently got a higher paying job or raise
  • If you currently have good credit

When should you not ask for a credit limit increase?

  • Don’t request a increase on limit on all your cards at once or after opening a new card
  • Ask your company if it will trigger a hard pull on your credit, sometimes a smaller increase will not trigger a hard pull. To learn more about credit inquires check out Hard vs. Soft Credit Inquires by Credit Karma.
  • If you just received a limit increase most companies will not grant a limit increase for at least another 3 months.

The next step will be learning control, just because you have a higher available credit does not mean you have to reach the limit. It is not good for you, your budget, or your credit score so check out 3 Easy Budgeting Tips.

Upgrading

Whether you are starting out with your first credit card or already established with a credit history consider thinking about upgrading. When you got your first credit card you may not have been offered the best credit card with the most benefits. But, once you do establish a good credit history with your card company check out what other cards they have. Some companies will allow you to upgrade to a card with greater benefits free of charge.

Two companies that come to mind are Capital One and Chase. Both of these companies have what I call “starter cards” that do not offer many benefits to the card holder but also have cards that offer greater benefits without annual fees. For example, if you start out with or are a currently cardholder of one of Capital One’s basic “starter cards” you could negotiate an upgrade to a Capital One Quicksilver, which provides 1.5% cashback on all purchases with no annual fee. For Chase it would be an upgrade from a Chase Slate to a Chase Freedom, which offers different cashback benefits depending on the quarter with no annual fee. However, most of the sign up bonus you will loose as you are not signing up for a new card but rather upgrading your existing account.

So, how do you actually negotiate an upgrade.

  • Explain your research, tell them how you have looked into the other cards they offer and are interested in the greater level of benefits and wanted to know more about upgrading
  • Emphasize your good credit history and score (paying each month, paying on time, etc.)
  • If they do say no, ask them how you can get an upgrade in the future, they most likely will tell you in more detail the qualifications they are looking for

When it comes to credit cards it is best to ask and be told no, rather than not ask at all.

 

If you have learned any tips in your credit card experience please share with us. Or if you’ve got a great idea or suggestion of what you would like us to blog about? Please send your inquiries to stashadvisor@gmail.com. We are all about bringing you the most value!

This blog post is provided for discussion purposes, and is not intended as professional financial advice. It’s intent is not to be used as the sole basis for your investment or tax planning decisions. To get more information please speak with a financial planner. Under no circumstances does this information represent a recommendation to buy or sell securities.