Did your credit card issuer increase your interest rate this month? How can you use your credit score to get better rates? Here are some tips:
Read your credit card mails regularly. Your credit card issuer can change your current rates at any time. However, they are required by the law to give a 15-day advanced notice. By checking your mails regularly, you can easily monitor your rates and fees. If your issuer announces that your interest rate is bound to increase, you can call them up right away before the new rate is implemented.
Request for a lower rate. Don’t put up with an unreasonable rate of interest. If you have been a good cardholder, your credit history should speak for itself. If you have a high credit rating, you deserve the best rates. Credit card issuers are often willing to modify their terms just to keep their best customers so call your issuer and speak with the manager about your concerns.
Pay more than the minimum. Don’t be content with submitting only the minimum due even if your credit card allows it. Make it a habit to pay off your balances in full each billing cycle. This way, you can avoid the additional interest cost. Remember, as you prolong your credit card debt, your charges also accumulate due to the interest rate and penalties.
Pay off your high-rate credit cards first. If you have more than one credit card, which one has the higher rate? If possible pay off your entire balance from your high-rate card immediately to avoid debt build up. You may also consider getting a zero-interest balance transfer credit card especially if you have excellent credit.
Use your credit card only for charges that you can pay off immediately. Avoid problems by being a smart credit card holder. Don’t use your card for purchases that you can easily pay in cash. Never use your credit card for an unplanned purchase.
Don’t maximize you credit limit. Even if your credit card has a low rate, avoid maximizing your credit limit. Using your credit line to the full can pull down your credit score. Leave at least 60% of your credit free from use.