7 Unwritten & Often Forgotten Credit Card Secrets
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.
(Photo by mike hipple)
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Tags: Capital One, Citi, Citi Business, Citi mtvU, Citi Platinum Select, Credit Cards, Discover, Foreign Transaction Fee, Insurance, Saving Money
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28 Comments - Share Your Thoughts
What exactly is a “credit pull” and why is it a bad thing?
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.
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
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.
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.
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.
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.
Cheers,
FIRE Finance
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.
[...] Jim spills the beans and shares with everyone 7 unwritten, often forgotten credit card secrets. [...]
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.
[...] for Financial Prosperity has Seven Credit Card Secrets to [...]
[...] for Financial Prosperity has 7 unwritten and often forgotten credit card secrets. Although I knew most of these, I had forgotten about requesting a credit increase without [...]
[...] Blueprint For Financial Prosperity: Before you start charging, you may be interested to read about some unfamiliar secrets that credit cards harbor. [...]
#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.
APROPOS OF CREDIT CARDS:
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).
THEY SHOULD BE ASHAMED!!!!!!!
[...] As a followup, check out Blueprint for Financial Prosperity’s 7 unwritten and often forgotten credit card secrets. [...]
Has anyone had success in getting the 3% Balance Transfer fee waived? If so, how did you do it?
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.
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?
[...] 7 Unwritten & Often Forgotten Credit Card Secrets @ Blueprint for Financial Prosperity: I’m not a fan of credit cards, but I must admit, this article taught me a few things about the plastic I didn’t know. [...]
[...] 7 Unwritten & Often Forgotten Credit Card Secrets by Jim @ Blueprint for Financial Prosperity. Capital One & Discover don’t have a foreign transaction fee charge [...]
[...] 7 Unwritten & Often Forgotten Credit Card Secrets @ Blueprint for Financial Prosperity [...]
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.
[...] 26th) at 8:06 am Eastern time to talk about how I started up blogging and more in detail about the 7 Unwritten & Often Forgotten Credit Card Secrets article I wrote last week. If you’re in the area, I hope you’ll tune in. I don’t [...]
[...] the discussion with John Hines focused more on the article I wrote about the 7 Unwritten & Often Forgotten Credit Card Secrets, this blog covers much more than that. John mentioned a few other topics I hit such as searching [...]
Hi,
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,
Bob
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?
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?
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