We've already mentioned that you may be able to raise your credit score with a phone call to your credit card issuer – but were you aware that you have other good reasons to call? Consider these three examples of how simple communication with your credit card company can pay dividends.
1. Negotiate for a Lower Interest Rate – In the same way that you can ask for a credit limit increase, you can ask for a lower interest rate. Competition among credit cards is intense. If you have shown yourself to be a good customer, your request may well be rewarded – but do your homework first.
Matt Schulz, Senior Industry Analyst at CreditCards.com, advises, "If you come armed with other offers...and you come to them and say, 'Hey, I've been a good customer, but your card has a 19% interest rate. I was just offered one with 15%, can you match it or I'm going to walk...there's a pretty good chance that they'll say 'Yes.'" A recent CreditCards.com survey found that 69% of cardholders who asked for a lower interest rate received one, but few people think to ask.
2. Requesting Fee Waivers – Did you realize that not all annual fees or late fees are set in stone? The CreditCards.com survey found that 51% of those requesting annual fee changes were able to get them waived entirely, while another 31% received a reduced fee. However, few people ask — only 10% of cardholders surveyed have ever asked for a break on annual fees.
More respondents asked to have late fees waived (25%) and they were even more successful, with 87% of requests being granted.
Even if a fee waiver or reduction is off the table, you may receive a counteroffer such as an enhanced rewards program or extra perks based on a particular spending level. It's up to you as to whether the counteroffer is worth keeping your card or looking for alternatives.
3. Preventing Fraud and Disputing Errors – Thieves tend to put small, innocuous charges on stolen accounts to see if the card is valid without drawing attention. If those small charges go unnoticed and unchallenged, thieves receive a green light and can lay waste to your credit before you realize that there is a problem. Keep an eye on your account, and if you see unfamiliar charges, call the credit card company to investigate further and/or dispute those charges. By keeping receipts, you will make the charges easier to double-check. If you would like to monitor your credit to prevent identity theft and see your credit reports and scores, check out our free credit monitoring service.
Meanwhile, see what types of fraud protection your card provides and how to set up monitoring and alerts to notify you of suspicious activity. Many cards already provide these protections, since it's also in their best interests that nobody racks up fraudulent charges on their card, but you can always negotiate if your card falls short. (Again, it helps to have a comparable deal in hand from a competitor.) A few minutes on the phone could provide you with greater peace of mind.
Credit card companies intend to make money, but they understand the risks of a competitive market. You can use that to your advantage by using common sense and simple communication to strike a deal – but make sure that your request is reasonable from the credit card company's perspective. If so, the CreditCards.com survey suggests that you have a very good chance of success. The worst that can happen is that your card issuer refuses your request, and you are no worse off than you were.
If you want more credit, check out MoneyTips' list of credit card offers.