6 Awesome Credit Card Tricks That Will Save You Money
Can you manage your credit cards as deftly as high stakes Vegas dealers handle their playing cards? You can learn how. Credit cards are important financial instruments, but you can also look at them as kind of a game. (See also: Top 5 Travel Credit Cards)
We all know people who use their cards irresponsibly to accumulate crushing debt, but if you play this game right, and stay out of debt, you can gain tremendous value from your cards. Here are six really cool tricks that have worked for me.
You have good credit, but somehow your card application is rejected. You can either sit back and wonder about the factors that may have contributed to your denial, or you can take another shot at getting your card approved. The fact is that your initial rejection was probably just some computer’s best guess as to your credit worthiness, and it was incapable of considering every important factor. What people don’t realize is that you can call your bank, speak to a human being, and ask him or her to reconsider.
When you reach your bank, remind the representative of your excellent payment history. You can also offer to reduce your credit line or close other accounts you may have with them. On a recent call to Chase, I was able to get approved for their Sapphire Preferred card by closing another card account that I had with them that I was going to cancel anyway. Banks desperately want your business, and they are anxiously waiting for you to call up and offer them a good reason for them to approve you.
2. Bonus Bumping
Have you ever applied for a credit card only to find out later that there was a better sign-up bonus offer available? Like reconsideration, you can contact your bank, inform them of the other offer, and ask them to apply it to your account. To their customer service representative, it’s as easy as changing the “promo code” field on their computer screen. While you can do this over the phone, many prefer to log into their bank’s website and send a secure message. By doing this, you’ll have the bank’s response in writing, so there will be no dispute over how many points or miles you should receive.
3. Threaten a Chargeback
I can’t tell you how many consumers I have met who have engaged in extended battles to get their money back from unscrupulous merchants. They call, argue, and even yell at the representatives of merchants in a time consuming and often-futile attempt to get a refund. If you paid with your credit card, you should only waste your time on a single call that is escalated to a supervisor. If that person is unwilling to refund your money, inform him or her that you intend to request a chargeback from your credit card issuer.
Retailers live in fear of the increased merchant fees that result from a chargeback, and they will often reconsider their position the moment they hear that word. Otherwise, a quick call to your bank will result in a temporary credit that will become permanent once you provide documentation supporting your claim.
4. Double Your Sign-Up Bonus
Real credit card gurus live for those amazing sign-up bonuses that come around every now and then. When Capital One offered their “Match My Miles” promotion, it was easy to earn as much as $1,100 as a sign-up bonus for opening a new account. Others were able to earn twice that by also signing up for the business version of the card. As sole proprietor, all you need to do is supply your social security number instead of a business tax ID. If you prefer not to go that route, just have your spouse or partner apply for the same card. Just as long as you have no temptation to spend more, there is little to lose and a lot to potentially gain.
5. Maximizing Your Statement Cycle
Those who pay their balances in full and on time are perpetually receiving a free loan from their banks. This is the smartest way to use your credit cards, but you can even take this to the next level. Any charge made the day before your statement closes will be due 20-25 days later. But if you make that same charge the day after your statement closes, then you have another extra 30 days to pay it without incurring interest. This means you can get an interest-free period of up to 55 days!
When cash is tight, many people know to wait until just after their statements are closed to make purchases. What most people don’t realize is that with some banks, such as Chase, you can actually extend your payment cycle by moving your due date back. They may not let you do this over and over again, but it is a great way to get a few extra days out of your statement period in order to push back your due date.
6. Taking Advantage of Gift Cards
These days, the terms of many reward cards contain all sorts of gimmicks to get you to spend more in order to receive more points, miles, or cash back. Some only offer a sign-up bonus after you spend a particular amount, while others give special rewards for transactions at certain categories of merchants. To take advantage of these promotions, the worst thing that you can do is to spend more money just to earn a reward.
Instead, you can use gift card purchases in creative ways. In order to reach the minimum spending threshold for a sign up bonus, you use your credit card to purchase gift cards for merchants you visit often, or even cash cards from Visa or American Express. Simply make the purchase before the deadline, and use the gift cards later. You can also buy gift cards at grocery stores in order to maximize bonus spending categories. For example, the Blue Cash Preferred® Card from American Express (review) gives customers 6% cash back from supermarkets. Customers can easily purchase gift cards at their local grocery store for anything from Apple to airlines, essentially earning that 6% elsewhere.
You can’t really expect to defeat a card shark on the street or beat the house at a casino, but you can regularly win big with your credit cards. The key is that banks are intensely competing for your business, which will always be your ace in the hole.
What are your favorite credit card tricks and tips?