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5 Secrets About Credit Cards Your Bank Would Not Tell You

5 Secrets About Credit Cards Your Bank Would Not Tell You

Credit cards be an enigma. Powerful tools if you use them right, but dangerous weapons if you’re not careful. On top of that, every card is loaded with tons of fine print you probably don’t know about (and your banks would rather you not know). Here’s a few secrets about your credit card that your bank won’t tell you.

Annual Fees Are Negotiable

Don’t feel like paying your card’s annual fee? Don’t do it. Call up your provider and ask nicely – and lots of times they’ll waive it. Use this script:

Customer Service [CS]: Hi, this is Mary with MasterCard. How can I help you?

You: Hi Mary, I’ve had this card for a while and I really like it. I’ve been a [Bank Name] customer for the last [number of years]. I’ve spent [$x] on this card and I’d really like to keep using it, but I didn’t realize there would be a fee. Is there anything you can do about that?

CS: Let me check.

A lot of times, they’ll say or act like they can’t do anything about it. This is where most people give up. Not you, stick around and be persistent.

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You: You said you’re not sure if you’re able to get the fee waived?

CS: Yes, that’s correct.

You: Well, can you check?

CS: I’m pretty sure we can’t waive the fee sir / ma’am.

You: Can you check with your manager please?

When the manager comes on, ask again with the first script. Be confident, but polite – they’re not going to want to do favors for jerks. When in doubt, be patient, polite and don’t give up until you get a direct answer from the manager in charge of the card. Often, they like to keep loyal customers and waiving the annual fee to keep one as a customer is a no-brainer. That said, it doesn’t work 100% of the time, so your mileage may vary, but it’s definitely worth trying. If they’re not going to waive the fee, then you can go on to the next tip.

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You Don’t Have To Cancel The Card

If you have an annual fee you don’t want to pay, but also don’t want to cancel the card (and want to keep your credit clean), you don’t have to cancel the card. Ideally, you’ve already had the conversation above. If so, continue on with this script:

You: Hi, well I’d really prefer not to pay an annual fee. Is there another version of this card without the fee?

CS: Oh, yes, there’s the _______ card.

You: Can you please confirm that there’s no annual fee with this card?

CS: Yes.

You: Can we do that?

CS: Sure, we’ll have that card out to you in the next 7-10 days.

You: Thanks for your help [their name].

Voila.

You Don’t Actually Have To Spend Money

If you want to hit the minimums on your card – you don’t have to spend tons of money to hit credit card bonuses for sign-ups and accrue lots of miles or points. The infamous buy $1,000 of coins from the US mint trick sadly no longer works – but there are other options out there. There are other techniques you can use to essentially spend money on your credit cards and accrue points or miles without having to pay tons of cash out of pocket.

The Vanilla Card Churn Strategy

Essentially, you load up vanilla reload cards at $500 each. Each one has a $3.95 sign up fee. You can typically load up to $5,000 on different cards. So basically, you’ve bought 5,000 miles for $39.50. That’s a mileage value of .008/mile – which is pretty darn good considering most miles are valued at about .002 each. You then transfer vanilla card balances to a bluebird debit card and use that money to pay off your credit card balance. There’s more in-depth information on this entire vanilla churn strategy here.

The Paypal Load Strategy

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This is similar to the vanilla, except you can use it in your Paypal account without paying the ridiculous Paypal credit card and international fees. If you have international employees – it’s often cheaper to load up a Paypal reload card and pay your employees with that balance than it is to pay an international + credit card fee if you tried to use your credit card directly on the site. There’s always more of these on the way as well. If you plug into the great community at flytertalk, you can get wind of when these types of opportunities pop up.

You Can Use Your Card To Travel For Free

If you start stacking up enough miles in your various mileage bank accounts, you can start to do pretty neat things as far as travel goes. Sure you can use those points and get cash back, but if you turn them into miles, you can book a RTW ticket like Steve did for just a few hundred bucks (which would normally cost thousands). Miles were also a huge way that Chris Guillebeau traveled to every country in the world.

Some of these trips start at just 140,000 miles – which is essentially 3 large signup bonuses for different cards. Even if traveling to the world’s ends isn’t your thing – you can still get a free flight or two out of strategically using your cards. Not too shabby.

You Can Use The Same Card Twice

If you have a card that gives you good perks, you can sign up for it twice. If you wait 9-18 months, you can re-apply and get the annual fee waived. This is great for mileage-accruing cards that give big signup bonuses. If you cycle the cards every 9-18 months, you can get 25,000-50,000 bonus points from each card (without paying the annual fee). Pretty cool!

Well there you have it – five credit card secrets your bank would rather you not know.

Do you have any secrets that you’ve found work magic with your bank?

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Featured photo credit: Bitzcelt via flickr.com

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Last Updated on March 4, 2019

How to Use Credit Cards While Staying Out of Debt

How to Use Credit Cards While Staying Out of Debt

Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

Do Not Treat Credit Cards as Your Funding Sources

Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

Make Sure to Always Pay Off Balances in Full Each Month

The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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Using Credit Cards with Rewards

Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

Featured photo credit: Artem Bali via unsplash.com

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