7 Unwritten & Often Forgotten Credit Card Secrets

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Credit card companies are just like every other business. There are essentially three concepts to understand when dealing with a business, especially credit cards:

  • They exist to make as much money as possible,
  • They have relatively well documented rules and operating procedures,
  • They’re willing to break #2 in pursuit of #1.

So, to that end, here are 7 unwritten and often forgotten credit card tricks or “secrets” (I hate the term “secrets” because how much of a secret can they be if I know it?) that may save you a few bucks someday. If you don’t learn a single secret or you have a secret of your own, please let me know! Secrets are better when you tell everyone!

1. Just ask: Lower interest, reduce or eliminate fees

This is truly the best tip of the bunch, hence the top billing, and everything else looks like chopped liver compared to this bit (despite how popularized it’s been of late). The credit business is extremely competitive, take advantage of it by asking for what you want. If you made a late payment and were assessed a late payment fee, call them up and request that they take it off. If your interest rate is too high, call them up and request that they lower it. If they decline, simply tell them that you want to cancel the card or that you’ll take advantage of a new offer that you just received in the mail. They make so much money from you when you spend (they charge the merchants a processing fee) that the piddly late fee pales in comparison to the riches they will reap by keeping you as a customer. If they don’t budge, punish them by taking your business elsewhere.

2. Roll credit limits of the same issuer onto fewer cards

This is a popular one with 0% balance transfer junkies because Citi has a “not so often spoken” rule of limiting a cardholder to at most three lines of credit (without regard to the actual dollar limit). This stinks for balance transfer arbitragers because they want to keep rolling that 0% balance from card to card to card and that gets dicey if they can only have three. One way of getting around this rule is to ask that you roll the credit limits of one of the cards into another one of the cards. They are generally willing to do this because the alternative is that you cancel the card and they lose the business. Since they were willing to give you the total limit in the first place, putting it on two cards instead of three hardly makes a difference to them. This has an added benefit for you from a credit score perspective – you reduce the number of open lines of credit while keeping your credit utilization and total credit limit the same. Double win!

3. Request an increase to the credit limit without a credit pull

I’ve written about how you can request a credit limit increase in the past and not get a credit pull but I wanted to repeat it in a post like this because it’s something not a lot of folks know. What you basically do is, through your online account management portal, go through the normal process of requesting a credit limit or line of credit increase. Sometimes, based on how long you’ve been with the issuer and your credit worthiness, they may offer you an increase on the spot without a credit inquiry. Do not bother trying this within the first six months or first year with the card, they generally won’t offer this without a credit pull so you’d just be wasting your time.

4. Capital One & Discover don’t have a foreign transaction fee charge

When you purchase something overseas, your credit card will often charge you a foreign transaction fee to handle the foreign exchange process for you. In fact, part of that fee is imposed by Visa and MasterCard itself, so any Visa and MasterCard that charges you less than 1% is actually eating the fee. Capital One and Discover are the only two companies that do not charge a foreign transaction fee; Capital One actually pays the fee for you and Discover, since it’s not on the Visa or MasterCard network, just doesn’t charge for it. As I wrote in the other article, if you want to pick between the two then I’d go with Capital One because Discover isn’t as widely accepted overseas (Capital One cards are Visa or MC).

5. Change your card to a different type or rewards program

Do you have a Citi Platinum Select card and you would instead prefer to have a Citi Professional card? Just call up and ask; they’ll probably honor your request. If they don’t, just ask to cancel the card and retentions will probably do it for you. This will only work if they’re the same class of cards, so if you want to change from a Citi mtvU card (student) to a CitiBusiness card (business), that will probably be impossible (but still worth asking). They figure that you can always cancel and apply for the new card anyway so they might as well reduce their overhead by just shifting it over for you. It’s all about lowering costs for them and retaining the customer, converting cards is hardly a chore.

6. Most cards double manufacturer’s warranty

Most credit cards will cover purchases on that card to double the original manufacturer’s warranty, up to an additional year. This comes at absolutely no cost and it’s offered because most people never take advantage of it. Part of the reason is that you often forget this is something that is even offered in the first place (because most people think of manufacturer’s warranty first and then straight to repair or replace) and the credit cards only mention this when you’re buying. 🙂

7. Most cards offer auto rental liability insurance

This particular “secret” has been documented quite a bit lately, the fact that many credit cards offer some form of rental car insurance (collision and loss) if you use that card to pay for the rental. What it doesn’t cover your personal auto insurance may also cover so between the two you often don’t even need the insurance (really it’s a waiver) from the rental company in the first place. Some cards, such as American Express, have programs where you can pay extra to have additional coverage.

{ 35 comments, please add your thoughts now! }

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35 Responses to “7 Unwritten & Often Forgotten Credit Card Secrets”

  1. mike says:

    What exactly is a “credit pull” and why is it a bad thing?

  2. jim says:

    A credit pull comes in two forms, hard and soft, and they’re bad because it’s an indication that you’re trying to get credit. If there are a lot of inquiries/pulls, then creditors surmise that you really want to get some credit and anyone who really wants to get credit raises a (small) red flag for them. I hope that answers your question.

  3. Lo says:

    Hi Jim, I have another question for you. In regards to the auto rental insurance, I had remembered that my dad said the insurance I am under (with my car that I drive) would cover rental cars also. So the last time I rented a car, I tried to decline Enterprise’s auto insurance. However, the guy explained to me that with their basic insurance, if there was any damage that fell below the deductible, I wouldn’t be responsible for it, so I got talked into purchasing that insurance. In that case, does AmEx cover those minor damages that don’t cost more than what my deductible is? TIA

  4. jim says:

    Lo – Unfortunately, no, the AmEx (and other credit card insurances) are secondary insurances. That means that they only pay out that which isn’t covered by your primary insurance.

    In short, it won’t cover damage that’s less than your deductible.

  5. Peter says:

    A couple of months ago, I tried to get Bank of America to change my University of Iowa card to an Ohio State card, but they refused. I had to apply for a new card, which I didn’t feel like doing at the time. So not all companies will honor a request to change your type of card.

  6. Great tips – thanks. My card company kept switching my payment dates so I was also late. Now I’m going to give them a call and ask for a refund on the charges. Cheers.

  7. FIRE Finance says:

    Handy tips, Jim.
    If products bought using the card gets stolen or lost (within 90 days or so – verify this) some credit cards would refund the cost.

    My 2 cents.
    FIRE Finance

  8. SavingWithMe says:

    Understanding that credit card companies are solely motivated by higher profits, like you stated, can work to your advantage in so many ways. Almost all of their rules are flexible based on them taking the risk of keeping you as a customer and you messing up one month allowing them to profit tremendously.

  9. Elaine says:

    Hi Jim – good advice – Thanks for the tip about the foreign transaction fee. I didn’t know that and it will come in handy for my husband this week! About rental car insurance…My husband and I went to Hawaii. We turned down the insurance offered by Hertz because we knew that Mastercard and our car insurance would probabably cover it one way or another if something happened. Turned out we backed into a sign and dented the fender of the car. Yes, Mastercard happily paid the $200 or whatever to fix it (it was below the deductable of our auto insurance policy), but they would not pay the $140 “administrative fee” charged by Hertz. So one way or another, it looks like they’ll get that money out of ya.

  10. thomas says:

    #1 and #2 are so important. You should always be able to lower your rate (within reason). Don’t expect that if you have bad credit and a ton of debt that you’ll get 7%, but with all the offers out there today you should be able to get your interest rate down. Personally, they can charge me 80% b/c I don’t carry a balance.

    Rolling up the credit limits is great for when you do end up doing balance transfers or playing the CC arbitrage game. I was able to shift 38k to a card with only 2k and take advantage of 0% interest for 9 months on BTs. You can always switch back.

  11. Walter V. Tuman says:

    Using a B of A Visa card, I purchased a $400 camera at Best Buy.
    Since I had a $100 bill, I decided to put it toward the purchase…
    The camera was stolen in London within 3 weeks of the purchase and
    I obtained documentation from the local police that, in fact, I was the
    victim of a burglary, etc.
    Within approx. one month after the claim, I was notified that the ENTIRE
    CLAIM was denied since the credit card was not used to purchase the item
    TOTALLY (i.e. small print absolves the underwriter from paying any amount which represents less that the entire purchase cost of item).

    • 10s.Star says:

      Why put money towards a purchase in the first place? A little insult onto your injury…You missed out on the cashback rewards, the interest on the $100 in the bank for an additional 40+ days, & you risked losing the $100.00 by having it on you.

      Unfortunately, the same result would happen if you used 2 or more credit cards to divide the camera’s cost…even if both cards had the theft “insurance”.

  12. Craig says:

    Has anyone had success in getting the 3% Balance Transfer fee waived? If so, how did you do it?

  13. kitty says:

    Thanks for the tips, especially the one on Discover and foreign transactions. I’ll take my Discover with me on my next trip. I didn’t know about warranty and insurance either.

    Catherine, the easiest way to deal with changes in due date is to sign up for automatic payment. I have my full balance automatically deducted, but if you don’t want to do that you could at least sign up for the automatic payment of the minimum and send the rest yourself. You can call your card and they’ll send you the form. This way you are always guaranteed to avoid the late charge. Still need to check the date on the bill to ensure you have enough money on your account on that date or just keep more money on this account than you need. They always deduct on the due date, sometimes even the next day (without any cost to you), so you get the advantage of the full grace period.

    About warranty. Where is it documented? I saw in some blog that Amex does it, but I couldn’t find it anywhere in my agreement.

  14. rj says:

    I have a question.
    Is it legal for credit card companies to allow financial transactions to go through to online poker sites if you are a U.S resident?

  15. Carey says:

    I’m sorry, but I don’t get #1. Perhaps I am a really lousy negotiator in need of an Alex Karras course, but this strategy never worked for me. I had a credit card from Chevy Chase that I had for nearly 15 years. Granted, there were a few bad years early, but after that, I had paid very regularly and had a current credit score upwards of 700, but they utterly refused to reduce the rate from 17.99%. I cancelled the card, despite the history, in 2003. Despite the THOUSANDS of dollars in fees they had earned from me in nearly 15 years, they were utterly unwilling to budge.

    I just think it needs to be said that negotiation only goes so far.

    • franky says:

      you had already paid every payment to that company and they saw no reason to change the interest becuase it was making money off you,so they called your ‘bluff’,i definately would’ve ended that contract a long time ago!

    • 10s.Star says:

      Competition….If you did not have a competing bank to transfer your balance, you did not have the upper hand.
      Get another card, transfer the balance, keep the existing card for later negotiation…Do not close the account.

    • Anonymous says:

      I work for a credit card bank the advise given here regarding fee negotiation is not correct and is nieve. when you call your credit card up and ark for a fee to be waived and they say no and you push back and threaten to close your account and they

  16. Bob says:

    I live in the Twin Cities area and heard your conversation on KTLK with John Hines. I thought the content was excellent and your website looks very helpful and loaded with great content as well. However, the billing was “Just a regular guy with nothing to sell”, etc. It just seems to me that full disclosure should be the order of the day since you are an Internet Marketer with AdSense Ads, etc. on your website. Take if for what it is worth, I’d hate to have people think you are a fraud if they found out that you are actually promoting your website for profit and all your good content becomes untrustworthy in the minds of the public.

    Just my opinion – good show,

  17. jim says:

    Hi Bob, thank you very much for the compliments and the comments. About full disclosure, I don’t know what qualifies me as an internet marketer but it’s not my full time job (if that’s a qualification). I do have Adsense on my site but I don’t know how that damages my credibility as a regular guy? Is it because I generate money from the site?

  18. Marg says:

    Is it legal for a credit card company to charge 34% interest? My son is in the United States Navy and while in the middle east, his bill was not paid, (spouse overlooked). to make long story short bills were paid late. when he returned he started to pay min. but visa closed his account. this past month he sent his payment late by a few days, this month, the bill came in and he is being charged 34% interest rate. Is this legal?

  19. Be careful of the rental liability insurance offered by your credit card. Rental companies, like many companies, have become ever more sneakier in dealing with the average consumer.

    Many rental car companies are now charging a “LOSS OF USE” fee if you get in accident with a rental car. They say that this covers their lost income when the car can’t be rented as it is being repaired.

    Magically, of course, the rental car company’s EXPENSIVE insurance covers the “LOSS OF USE” fee while your credit card insurance does not.

    Makes you sick to your stomach.

  20. Anonymous says:

    i have a chase credit card with 17, 750.00 the balance is due end of july-this has been 0% interest for 12 months-it was a balance transfer. Would you pay it off-which I can do, but this will deplete savings just leaving 2,500 or would you do another 12 month balance transfer 0% interest for 12 months? I pay the minimum each month and save enough to pay the card off by the 12 months. the offer I have for balance transfer says I can write a check up to 20,000 deposit in my account and use as I would like (it is from chase-so I can’t write the check directly to chase to pay off the chase credit card. Would I be doing the wrong thing, in your opinion, to write the check for 20, 000, deposit it in an account to draw interest until it is due in 12 months?

    • franky says:

      Ask to lower the payment then pay it all off in a single pay,if you try to pay it over 12 months they can change the pay dates(inducing late fees) or change the interest rate(not saying they will,but they can).
      Also you want to keep your balance to limit ratio low for the rest of those months to achieve a higher score over the course of the year vs. trying to put each paycheck in payments.

    • 10s.Star says:

      I’ve done it before and still in the process of a similar arrangement….0% INDEFINATELY. I told “them” in both cases of my intentions. The banks set up these programs based on statistics. You are on the right track. Use Autopayment option. Of course, DO NOT do this if you are planing on buying a house or car or quoting insurance. It will adversely affect your credit score through new credit request, increasing credit ratio and skewing credit utilization distribution.

  21. joe says:

    This info is now outdated. These rules don’t apply to the credit card industry anymore.

    If you try to pull the “i’ll move my business elsewhere” line with them, They’ll be more than happy to let you take your $8000 balance that you make $200 payments on every month to another financial institution…go ahead, owe them money, is what they’ll say to that.

    Only the very affluent qualify for any potential “retention” offers.

    CC companies are in a risk reduction mode right now, and probably will be for quite some time.

  22. Credit Card Ques says:

    I have an open and active credit card with Citibank. I been making all my payments on time for years and been a customer for almost 5yrs now. There APR just went up because the of the economy so they say. I realize last mth I just max out my card. Is there a way to give them about 30% (give or take) of the balance and they can credit me 10% or even 30% (like match on match)?
    For example CC balance is $6000 and I want to pay them $2000. Can they credit me $1000?
    I was asking this because I cant pay there new APR. It went from 9% to 23%! So I was thinking give them a big lump and they credit me something and the mthly payments will lower and they will get there money faster.

    • Jim says:

      They won’t be able to do the match idea you suggest but you could always try to convince them to put your APR back to 9%. If not, I think a balance transfer to another card might be in order.

  23. valerie says:

    My husband and i are going through a divorce, and i am taking all of the credit card debt. Our credit is shot due to unemployment, and i need to know if there is a way to change the liability on the cards from his name to mine? I can’t find anything on the internet that tells me how to do this. Any ideas?

  24. Luke says:

    A great way to take advantage of credit card I’d to use the cashback bonus. I usually will charge everything on my discover card. However, I make sure that I’m already able to buy the product before I charge it. This way I can pay it off in full each month and I never pay a dime in interest. Since I use the card a lot, I get cash back from discover sometimes up to ten percent of the purchase (it depends on the promotion they are doing). If you were smart and knew how to control yourself, using the card only for emergencies would be stupid if you can get cash back. Just live with in your means. It’s that simple.

    • Shirley says:

      We also do this, including utility bills, to the tune of $600 per year back. That’s a GREAT return on a $0 output and a very little bit of bookkeeping!

  25. renee says:

    hello, i understand the whole threatening to take your business elsewhere tactic, but every credit advice website ive looked at pretty much states that closing credit cards is a bad idea because that good spending history eventually falls off your credit report and also hacks at your credit to debt ratio. its been explained like having straight A’s and not having that on your record pretty much, and all though i see most of your advice as helpful, i dont think you should be telling people to close accounts

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