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5 Secrets that Credit Card Companies Won’t Tell You Up Front

5 Secrets that Credit Card Companies Won’t Tell You Up Front

While there are a lot of terms and conditions that are buried in the fine print of credit card agreements, most people only pay attention to the big numbers in the summary box: the interest rate, the penalty interest rate and late fees.

Although these are important factors that can help you choose the right credit card, there are still some little-known facts that can make or break your creditworthiness once you’ve decided on a card and have started using it. Here are five secrets that credit card companies won’t always tell you directly, but that you can use to your advantage when building or maintaining your credit profile:

Credit Card Companies Can ‘Snoop’ on How You Pay on Other Cards

Most people realize that payment history on other accounts directly impacts their credit scores, which in turn affects whether or not their credit card application is accepted. However, this initial check is not the only time that your payment history can affect your credit card account.

If you are consistently late or over the limit on your other credit card accounts, some credit card companies will raise the rate you pay on their card, even if you’ve never been late paying them. The rationalization is that if you have poor payment performance on one account, theirs is likely to be impacted in the future.

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They Can Raise/Lower Your Credit Limit at Any Time

In the same vein, how you pay other accounts can also affect your credit limits. Late payments to other accounts or going over your limit on other accounts can cause your credit limit to be lowered on accounts where your payment history and credit utilization is satisfactory.

For example, let’s say you have a credit card with a $10,000 limit that you pay on time, and never use more than 20% of the balance. And let’s also say you have a credit card with a $5000 limit that is maxed out, and you’ve been late on a few payments. The company that issued the $10,000 credit card may decide to lower your credit limit significantly, even if you’ve never been late with a payment for them.

This will directly impact your ability to get new credit, as part of your credit score is based on your credit utilization and lower credit limits are seen as higher risk and can lower your credit score.

You Can Ask for a Credit Limit Review Any Time

On the other hand, if you have a good payment history across all of your accounts but haven’t gotten a credit limit increase, in most cases you can just ask for one. Some credit card companies make this easy and automated. To see if your credit card company is one of these, just log into your account and look for a link that says “Credit Limit Increase” or “Credit Limit Review”.

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Otherwise, you can call customer service and ask directly. In most instances, you can ask for a credit limit increase every six months.

Be aware that this may incur a hard inquiry on your credit file depending on the credit issuer, so don’t request credit limit increases on all of your cards at the same time.

There are a few credit card companies that do automatic and periodic reviews, in which case you won’t be able to ask but you should be seeing regular limit increases if your payment history and credit scores are satisfactory. If not, call and ask about their criteria for raising credit limits so you know what you need to improve in order to qualify.

Paying Early Cuts Your Balance Faster

Nearly all credit cards charge interest on your average daily balance, and most cards have a 30-day grace period so that if you pay off your statement on or before the due date, you don’t accrue interest.

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If you can’t pay off your entire credit card balance, the next best thing is to pay early. Why? Because lowering your balance early in the month lowers your average daily balance, which in turn lowers the amount of interest you pay for your purchases.

For example, let’s say you have a $1,000 balance on your card. If you pay $100 off immediately, you’ll only pay interest on the $900 balance remaining throughout the month. If, on the 15th of the month, you make an additional $100 payment, your average daily balance will be calculated like this: (15 x $900 + 10 x $800)/30 = $850.

Therefore, instead of paying interest on the full $1,000 balance like you would if you waited to pay at the end of the month, you’ll only pay interest on $850. This adds up in the long run, especially when you have higher balances.

You Can Ask for (Some) Penalty Fees to be Waived

Let’s say you get a payment in a few days late, and are hit with one of those pesky $30+ late fees. Nothing to do but pay up, right? Wrong.

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If you have an excellent payment history with the credit card company, in most instances you can request to have that fee waived. It’s generally not something that you can request online. You’ll need to call in to speak to a representative, and expect them to scrutinize your past payment history and credit utilization before agreeing.

Usually, you can only make this request once per year, or once every six months at the most, so don’t waste it.

To Sum Up…

Credit card agreements have a lot of confusing terms and conditions in the fine print, but there are ways to use these to your advantage if you are savvy and keep track of how you are using your credit. Pay attention to how much of your credit you’re using on each card, pay early, and make sure you are getting credit limit increases in order to improve your credit scores a

Featured photo credit: Paper money, extreme macro/Kevin Dooley via flickr.com

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5 Secrets that Credit Card Companies Won’t Tell You Up Front

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Published on November 8, 2018

How to Answer the Tough Question: What are Your Salary Requirements?

How to Answer the Tough Question: What are Your Salary Requirements?

After a few months of hard work and dozens of phone calls later, you finally land a job opportunity.

But then, you’re asked about your salary requirements and your mind goes blank. So, you offer a lower salary believing this will increase your odds at getting hired.

Unfortunately, this is the wrong approach.

Your salary requirements can make or break your odds at getting hired. But only if you’re not prepared.

Ask for a salary too high with no room for negotiation and your potential employer will not be able to afford you. Aim too low and employers will perceive as you offering low value. The trick is to aim as high as possible while keeping both parties feel happy.

Of course, you can’t command a high price without bringing value.

The good news is that learning how to be a high-value employee is possible. You have to work on the right tasks to grow in the right areas. Here are a few tactics to negotiate your salary requirements with confidence.

1. Hack time to accomplish more than most

Do you want to get paid well for your hard work? Of course you do. I hate to break it to you, but so do most people.

With so much competition, this won’t be an easy task to achieve. That’s why you need to become a pro at time management.

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Do you know how much free time you have? Not the free time during your lunch break or after you’ve finished working at your day job. Rather, the free time when you’re looking at your phone or watching your favorite TV show.

Data from 2017 shows that Americans spend roughly 3 hours watching TV. This is time poorly spent if you’re not happy with your current lifestyle. Instead, focus on working on your goals whenever you have free time.

For example, if your commute to/from work is 1 hour, listen to an educational Podcast. If your lunch break is 30 minutes, read for 10 to 15 minutes. And if you have a busy life with only 30–60 minutes to spare after work, use this time to work on your personal goals.

Create a morning routine that will set you up for success every day. Start waking up 1 to 2 hours earlier to have more time to work on your most important tasks. Use tools like ATracker to break down which activities you’re spending the most time in.

It won’t be easy to analyze your entire day, so set boundaries. For example, if you have 4 hours of free time each day, spend at least 2 of these hours working on important tasks.

2. Set your own boundaries

Having a successful career isn’t always about the money. According to Gallup, about 70% of employees aren’t satisfied with their current jobs.[1]

Earning more money isn’t a bad thing, but choosing a higher salary over the traits that are the most important to you is. For example, if you enjoy spending time with your family, reject job offers requiring a lot of travel.

Here are some important traits to consider:

  • Work and life balance – The last thing you’d want is a job that forces you to work 60+ hours each week. Unless this is the type of environment you’d want. Understand how your potential employer emphasizes work/life balance.
  • Self-development opportunities – Having the option to grow within your company is important. Once you learn how to do your tasks well, you’ll start becoming less engaged. Choose a company that encourages employee growth.
  • Company culture – The stereotypical cubicle job where one feels miserable doesn’t have to be your fate. Not all companies are equal in culture. Take, for example, Google, who invests heavily in keeping their employees happy.[2]

These are some of the most important traits to look for in a company, but there are others. Make it your mission to rank which traits are important to you. This way you’ll stop applying to the wrong companies and stay focused on what matters to you more.

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3. Continuously invest in yourself

Investing in yourself is the best investment you can make. Cliche I know, but true nonetheless.

You’ll grow as a person and gain confidence with the value you’ll be able to bring to others. Investing in yourself doesn’t have to be expensive. For example, you can read books to expand your knowledge in different fields.

Don’t get stuck into the habit of reading without a purpose. Instead, choose books that will help you expand in a field you’re looking to grow. At the same time, don’t limit yourself to reading books in one subject–create a healthy balance.

Podcasts are also a great medium to learn new subjects from experts in different fields. The best part is they’re free and you can consume them on your commute to/from work.

Paid education makes sense if you have little to no debt. If you decide to go back to school, be sure to apply for scholarships and grants to have the least amount of debt. Regardless of which route you take to make it a habit to grow every day.

It won’t be easy, but this will work to your advantage. Most people won’t spend most of their free time investing in themselves. This will allow you to grow faster than most, and stand out from your competition.

4. Document the value you bring

Resumes are a common way companies filter employees through the hiring process. Here’s the big secret: It’s not the only way you can showcase your skills.

To request for a higher salary than most, you have to do what most are unwilling to do. Since you’re already investing in yourself, make it a habit to showcase your skills online.

A great way to do this is to create your own website. Pick your first and last name as your domain name. If this domain is already taken, get creative and choose one that makes sense.

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Here are some ideas:

  • joesmith.com
  • joeasmith.com
  • joesmithprojects.com

Nowadays, building a website is easy. Once you have your website setup, begin producing content. For example, if you a developer you can post the applications you’re building.

During your interviews, you’ll have an online reference to showcase your accomplishments. You can use your accomplishments to justify your salary requirements. Since most people don’t do this, you’ll have a higher chance of employers accepting your offer

5. Hide your salary requirements

Avoid giving you salary requirements early in the interview process.

But if you get asked early, deflect this question in a non-defensive manner. Explain to the employer that you’d like to understand your role better first. They’ll most likely agree with you; but if they don’t, give them a range.

The truth is great employers are more concerned about your skills and the value you bring to the company. They understand that a great employee is an investment, able to earn them more than their salary.

Remember that a job interview isn’t only for the employer, it’s also for you. If the employer is more interested in your salary requirements, this may not be a good sign. Use this question to gauge if the company you’re interviewing is worth working for.

6. Do just enough research

Research average salary compensation in your industry, then wing it.

Use tools like Glassdoor to research the average salary compensation for your industry. Then leverage LinkedIn’s company data that’s provided with its Pro membership. You can view a company’s employee growth and the total number of job openings.

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Use this information to make informed decisions when deciding on your salary requirements. But don’t limit yourself to the average salary range. Companies will usually pay you more for the value you have.

Big companies will often pay more than smaller ones.[3] Whatever your desired salary amount is, always ask for a higher amount. Employers will often reject your initial offer. In fact, offer a salary range that’ll give you and your employer enough room to negotiate.

7. Get compensated by your value

Asking for the salary you deserve is an art. On one end, you have to constantly invest in yourself to offer massive value. But this isn’t enough. You also have to become a great negotiator.

Imagine requesting a high salary and because you bring a lot of value, employers are willing to pay you this. Wouldn’t this be amazing?

Most settle for average because they’re not confident with what they have to offer. Most don’t invest in themselves because they’re not dedicated enough. But not you.

You know you deserve to get paid well, and you’re willing to put in the work. Yet, you won’t sacrifice your most important values over a higher salary.

The bottom line

You’ve got what it takes to succeed in your career. Invest in yourself, learn how to negotiate, and do research. The next time you’re asked about your salary requirements, you won’t fumble.

You’ll showcase your skills with confidence and get the salary you deserve. What’s holding you back now?

Featured photo credit: LinkedIn Sales Navigator via unsplash.com

Reference

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