Like most casinos, credit card issuers are always very profitable. But unlike visitors to a casino, it’s always possible to “beat the house” when you use your credit card the right way.
Some of the tricks are fairly simple, or obvious, while others take a certain amount of clever planning.
Here are seven ways that you can beat the credit card companies at their own game.
What’s Ahead:
1. Avoid interest charges by paying your statement balances in full
One of the big ways that credit card issuers make money is through interest payments. Furthermore, about half of all American credit card users report carrying a balance on their credit cards all or part of the year. But, when you pay your statement balance in full each month, you can always avoid interest charges. There’s even a credit card industry term for those who don’t pay interest. They call us “deadbeats.”
2. Maximize your grace period
A credit card’s grace period is the time between when your statement closes and when your payment is due—typically 21 to 25 days. When you pay your balance in full before your due date, then you can avoid interest charges. This grace period can amount to a free loan from the credit card issuers, and you’ll want to make the most of it.
For example, if you make a large purchase at the beginning of your statement period, then you’ll have 51 to 55 days before the payment is due. This can equate to a free loan for nearly two months.
As long as you’re aware of how this works, and when your card’s statement period ends, you can postpone a large charge until the next statement period to have the longest possible time to pay off your charges without incurring interest.
3. Get great sign-up bonuses
The credit card industry is so incredibly competitive that they’re actually willing to pay you just to give their products a try. Nearly all card issuers will offer new applicants generous sign-up bonuses in the form of points, miles or cash back.
These offers can be incredibly generous, and there’s no reason why you can’t take advantage of them as often as you want, although some card issuers restrict the number of times you can sign up for their cards. Just make sure that you can manage all of your cards responsibly, and don’t use them to go into debt.
You’ll also want to make sure you can comfortably reach the minimum spending requirements, without making any unnecessary purchases.
Check out our favorite cards with excellent sign-up bonuses here.
4. Get your fees waived
One of the ways that credit card issuers make money is by charging you fees. These fees can include annual fees, late fees, foreign transaction fees and others. However, because the industry is so competitive, it’s very common for card issuers to waive fees upon request.
So, if you happen to accidentally incur a late fee, or if you just don’t feel like paying an annual fee, contact your card issuer and ask to have it waived. Also, it might help to let them know that you are considering closing your account because of the fee.
5. Ask for special offers
If you have a rewards card, every now and then you’ll probably receive an offer to receive additional rewards for using your card a bit more. But what few people realize is that you can call your card issuers and simply ask to have a promotional offer applied to your account.
It won’t always work, but it never hurts to ask. Sometimes, a card issuer might have multiple offers available, and let you choose.
6. Use all of their benefits
Many premium travel reward cards come with an extensive list of travel insurance and purchase protection benefits. Some of them, like accidental death insurance, are ones that you never hope to use, while others can be quite valuable. If you take a few minutes to read through your card’s guide to benefits, you’ll certainly find some that you can use.
For example, accidental damage and theft protection is great for purchasing fragile electronics, or perhaps a new drone that might crash. Price protection policies can offer you a refund when an item goes on sale, or even if you just find it for a lower price elsewhere. And your card’s travel protections can cover you when your luggage is lost or delayed, or even when your flight is cancelled due to weather, and you need to spend extra on a hotel and food.
7. Get a new card, without applying for a new account
If you’re not happy with the card you have, you don’t have to cancel your account. What you can often do is request a product change to a different card, without filling out a new application.
This allows you to keep your account open and its history remains on your credit report, but you won’t receive a sign-up bonus.
Summary
Credit card companies really want you to use their cards—that, after all, is how they make money. If you know how to beat the credit card companies at their own game, you can get rewards, have fees waived, and more.