Paying credit card bills sometimes feels like a game to cardholders. If cardholders get it right, they receive ease, convenience, and rewards. If they get it wrong, they lose and get stuck with fees, debts, and penalty rates.
As a cardholder, it’s important to ensure that you have the perfect credit score. That’s because it determines a lot more than the loan you can get and the expected interest. Remember that lenders conduct a detailed assessment of your credit report. It’s this report that determines whether you’ll qualify for any form of credit.
If your credit report is poor, you should work on getting it back on track. This is a process you can carry out yourself and repair credit report errors. A number of companies provide professional credit repair services. Just ensure you get one that’s reputable, effective, affordable and, with good customer service.
Winning the Credit Card Payment Games
It’s clear that credit cards are a game and banks already set the playing field. And, these institutions made sure that the odds are stacked against you. So, where is the rulebook? Well, it must have been buried somewhere no one can access it. But, a lot of people still choose to play. I mean, it’s a game anyway, right?
These tactics may be termed unfair or evil. However, the game can be won if you take the time and learn the ropes. Take time and go through the following tactics to better your chances of winning.
1. View Cards as a Convenience, Not a Loan
It’s a mistake to use plastic as a short-term loan, rather than a handy payment device. Charging items you can’t pay for in cash or using cash advances can be a costly affair.
A cash advance can cost you differently based on your card issuer. Some issuers see cash advances as an indication of financial instability. As a result, they may decide to cut your credit line. Their other option would be to raise your interest rate.
2. Know Each Card Limit
Many consumers think it’s a good idea to increase their credit line. But, using too much of your credit every month can mess up your score. It backfires because credit scoring formulas evaluate how much of your credit line you use each month. This is known as credit utilization.
Credit utilization is the percentage of the total credit of the user. With it, the general rule of thumb is that you’re supposed to keep a credit utilization of below 30 percent. The less you utilize, the better it is for your score.
People who cannot pay off their balances every month have options. They can ask the card issuer to give them a larger credit limit.
3. Understand Due Dates and Processing Times
There’s a misunderstanding among many consumers that their payment is received when it’s postmarked. When dealing with credit card companies, payments are received once they’re cashed.
If you’re paying online, electronic payments do not mean immediate. Thus, you must ensure you talk to a bill-pay provider to know the number of days to allow for delivery. Remember that weekends and holidays don’t count when calculating delivery times for e-payments.
4. Hit Back at Penalty Rates
Requests to have penalty rates or fees waived whenever you’re assessed. You can take advantage especially if you have good credit. Waiving late fees is done on a case-by-case basis. Unfortunately, a lot of cardholders don’t make the requests by assuming that it’s a done deal. Some don’t ask simply because they feel embarrassed for missing the deadline.
If your request to have your penalty rates waived fails, just mark your calendar. Then ensure you make six consecutive payments on time. With that, your card issuer will analyze your records and decide to restore your normal rate. You can go ahead and thank the Credit CARD Act for that.
Feel free to call the issuer if that doesn’t happen automatically. Ask to speak to the supervisor and cite the CARD Act in case you don’t get feedback.
5. Know Where You Are
Losing track of what you’ve spent and how much you owe is the worst thing that can happen to a cardholder. Get into the practice of recording all transactions. Just like you record checks whenever you write them.
Get in the habit of writing your credit purchases in your checkbook whenever you spend money. Write down the exact amount of your purchases and subtract it from your bank balance.
Make it a point to circle credit purchases in a different color, say red. That way, it becomes easier to check the circled amounts against the credit-card statement when your statement arrives. Once you confirm that everything is okay, go ahead and write a check for that particular amount and send it on time.
6. Find the Cards With the Best Rewards
The most important step to make is to ensure you get the right rewards credit card. Rewards cards in the past used to be straightforward. You’d spend money and earn points or cash back. Currently, cardholders are only awarded for specific spending categories. The card may also have a rotating bonus classification.
Apply for cards endowed towards your buying habits. Avoid settling for a card that offers a mere one percent if it offers cash back. Look for cards that offer at least 3 or 5 percent.
Don’t be quick to dismiss a credit card because it comes with an annual fee. Some of them have the best rewards. Many of such cards waiver the first-year fee. This is important as it gives cardholders time to decide if the rewards are worth the costs.
7. Get Creative With Your Charging
Rather than buy new items with the hope of earning rewards, how about using your card instead of an online bill pay service or cash.
You can pay ahead on insurance if you must spend enough to receive a sign-up bonus. You can load up on gift cards for the grocery store or purchase a year’s worth of trash service.
Find out about the processing fee before making a switch. An instance is where insurance companies let cardholders make credit card payments and charge them for the privilege. Do your research to ensure your rewards are worth it.
Always consider shopping through your issuers’ website when doing online purchases. That’s because a lot of credit card companies have online malls that give consumers a chance to buy from major retailers. These purchases will have you earning bonus points, cashback, or miles.
Credit cards are here to stay. Thus, we must learn how to play the game credit card companies play. However, winning the games will not be easy. You must learn the ropes to understand how to go about it. I hope the tactics presented in this article have been helpful and have boosted your chances of winning next time.