Many of us who have credit cards are not always inclined to interact with issuing companies. As a rule, we contact them only in case of problems or when we need additional help or information. Even if you don’t have the habit of consulting your bank too often, it’s worth picking up the phone from time to time to find out some issues. Here is an example of three topics that should be discussed with your credit card issuer.
Credit limit increase
The higher your credit limit, the more opportunities you have to pay your expenses. It can be both good and bad. Having a higher credit limit opens the way to cost overruns, and if you go this route, you run the risk of getting into debt, which will have to pay huge interest.
On the other hand, a higher credit limit may be useful for several reasons.
Firstly, it can serve as protection against unforeseen financial problems. As a rule, there should always be an amount in your savings account that you could live on for three months or more and pay for urgent unforeseen expenses (for example, repairing a house or a car). But if you do not have savings for a rainy day, a high credit limit will make it possible to meet unforeseen expenses and, ideally, quickly repay them.
In addition, increasing your credit limit can help improve your credit rating. One of the main factors influencing the calculation of your credit rating is your use of a loan, i.e. the percentage of the limit available to you that you use. It is important that the load does not exceed 30%, which means that if you have a loan of 10 thousand dollars, you should not have more than 3 thousand dollars of outstanding debt. If your debt reaches 4 thousand dollars (that is, you use 40% of the limit), then this may lower your credit rating. But if you increase the credit limit from 10 to 12 thousand dollars, then you will return to safe territory. That’s why it’s worth asking for a higher limit, even if you’re not really planning on using it.
Low interest rate
Your annual interest rate is actually the rate that you pay on the balance of your credit card. The lower it is, the less your credit card debt will cost you.
Ideally, you should only use a credit card, which you can afford to pay by the time the relevant bills arrive. But sometimes life makes its own adjustments, and if you are forced to take out a loan, then a lower percentage can facilitate its repayment.
Change payment schedule
You probably noticed that your credit card account statement dates from the same number as the deadline for paying off the debt. But if this cycle does not fit well with when you get paid, then it becomes difficult to control the timely repayment of the loan.
Suppose your current billing cycle ends on the 10th of each month, and your bills must be paid on the 9th of the next month. If you, as a rule, receive payment no earlier than the 15th day, then this gap may lead to the fact that you cannot fully pay your bills. Instead of letting this happen, it makes sense to contact your credit institution with a request to adjust your billing cycle.
Why the lender is ready to make concessions
Now you may be thinking: “Why can a bank servicing credit cards satisfy any of the above requests?” The answer is simple: if you are a good client who pays his bills on time (even if these are just minimal payments), then your credit company wants to see you their client in the future. Thus, the bank may agree to any of the above requirements, especially with a change in the billing cycle.
In addition, if your credit rating has improved since the first time you applied for your card, its issuer may be more than willing to provide you with a higher credit limit and lower your interest rate. As with many things in life, if you don’t ask, you won’t get anything. Therefore, if the above changes benefit you from the fact that you discuss them with your creditor, there will be no harm.