Think of a credit card company like a casino. Your goal when playing their games are to make money. There’s the saying “the house always wins”. That is only the case if you let them win. In this blog post, we will show you 5 ways you can beat the credit card companies at their own game.
1. Avoid interest charges by paying your statement balance in full
A majority of a credit card company’s revenue comes from interest payments paid by credit card holders. On average, in 2020, Americans carried an average balance of $5,315 of credit card debt1. The average credit card annual percentage rate (APR) is between 15.56% and 22.58% according to U.S. News’ database2 . That's a heck of a lot of money being paid to credit card companies on a monthly basis! So by paying your statement balance in full each month, you can avoid these interest charges.
2. Maximize sign-up bonuses
Most cards nowadays have sign-up bonuses. Spend X amount of dollars and receive X amount of point, miles, or cash back. These offers can be nice and there’s no reason why you can’t take advantage of them. Just make sure you can manage all cards responsibly and do not make unnecessary purchases to reach the minimum spending requirements.
3. Ask the credit card company to waive your fees
Another way credit card companies make money is through fees such as annual fees, late fees, foreign transaction fees, and many other. One trick to waiving fees is to give the company a call and let them know you are considering closing your account because of the fee. Since they want you as a customer, they would be more incline to waive the fee this time to keep you. Just make sure not to abuse this power.
4. Use your credit card benefits
Many premium travel rewards credit cards come with an extensive list of benefits. Most people either don’t utilize all the benefits or don’t even know what the benefits are. Remember the benefit paid for by the hefty annual fee you are paying. Make sure to utilize most, if not all, benefits to get your money’s worth.
Some examples of benefits are free credits for Global Entry or TSA Pre✓®, Uber or Lyft monthly credits, or extra redemption value when it comes to proprietary reward points. With a combination of multiple rewards and benefits, there will be a way to get more than what you paid for.
5. Ask for special offers
If you had a rewards credit card for some time, every so often you probably have received an offer to receive additional rewards by using the specific card a bit more. For example, XYZ credit card company will give you $10 if you use ABC card 5 times within the next month. What people do not know is that people can call the credit card company and simply ask to have the promotion or offer applied to the account. Note, this method does not work every time. But it does not hurt to ask.
Good luck! And let us know how you've used these 5 strategies to beat credit card companies at their own game!
In good financial health,
Tori
1https://www.experian.com/blogs/ask-experian/consumer-credit-review/