credit-card-companies

Increase Your Credit Score: 5 Things to Ask Your Credit Card Company

Increase Your Credit Score: 5 Things to Ask Your Credit Card Company

The average household has just over $16,000 in debt. However, this doesn’t mean that you are out of luck. There are things you can do to improve your credit score and help reduce some of your debt. How? Simply ask your credit card company to help you with one or two of these five things.

1. Waive late fees

Everyone panics when they realize that the deadline for payment has passed. The issue that credit cards charge you an average late fee between $10-$49. What most people don’t know is that many banks will erase the first late fee if you simply ask them.

In fact, 89% of people who ask will get get the fee waived. This is something very important for you if it is your first time being late. It’s always best to have a pristine record, but sometimes there are legitimate reasons. There might have been a family emergency or an illness. Obviously, don’t make a habit of calling to ask for forgiveness, but every once in a while if something goes wrong, simply talk to the credit card company or the bank. Ask them if they can get rid of that fee. They are people too, and you may be surprised by how often they are willing to make exceptions.

2. Lower minimum payments

Ask for a lower minimum payment. If you have currently fallen on hard times, do not hesitate to call your credit card company and ask them about this If, for example, you have recently become unemployed, calling to ask about a forbearance agreement or long-term repayment plan something like this to help you press pause essentially on the deck below until you find another job. This will help me to stay in good standing without breaking your bank.

3. Reduce your APR

Ask your company to reduce your APR. But, be prepared to make a case. There are a negotiation tactics you can use.

If you receive mail from other credit card companies asking you to sign up now, don’t necessarily throw it away. While you might not plan on using it, keep it to negotiate with your current credit card company. This proves to your existing credit card company that you have other options and that other companies want your services. For instance, show them that the competing credit card is offering you a 15% interest rate and that yours is currently at 20%. Be polite, but ask them clearly if they can match that 15%.

If you have been a longtime client, reminds the company that you have been a loyal customer.

If your bank offers to reduce your APR by a few percentage points, but don’t hesitate to ask for a little more than that. 78% of people that ask for a lower APR end up getting one. This makes a big difference. With $5000 of credit card debt and an APR of 18%, it would take eight years to pay it down with a $100 monthly payment. On the other hand if you get your interest rates dropped by just 3%, it would only take a 6.5 years.

4. Change your due date

If you have an odd due date for your bills, call the company to change it. A lot of people end up having bills at various times throughout the month because of when they signed up for service. If you forget to pay your bill regularly because your credit card payment comes in between your two paychecks, just ask the company to change it. It’s all about making your payments on time, each time. If you only get paid once a month at the first of the month, ask them to set a due date at the beginning of the month before your money has gone to other needs.

5. Ask about bonuses

While you are calling your credit card company company, also ask if they have any additional rewards that you might be able to use. A lot of people miss out on unused and untapped potential with a credit card. Today, almost every single credit card out there as an option for a perk. These perks are things that give you rewards for each dollar you spend. If you’re smart about it, you can use a credit card to help rebuild your credit score will simultaneously earning points that get you free plane tickets or free meals at your favorite restaurant.

Takeaways

After all of these changes, you may feel like you’re getting back on track. However, perhaps there are incidents before calling your credit card company that leave a stain on your credit report. What can you do in that case? You always have the option of choosing a top credit repair company in that situation. A reputable credit repair company can also increase your credit score. Often, some combination of credit repair options is needed for optimal results.

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How to Get Rid of Credit Card Debt

How to Get Rid of Credit Card Debt

Credit card debt is all to common. Most than 45% of Americans carry a balance every month. This is even after knowing that this balance will eventually come back with a vengeance. A cardholder who owes $15,956 (the average debt per household) will need to pay $11,000 in interest if only the minimum due is paid each month. This is why it’s extremely financially savvy to get rid of credit card debt.

Life can throw many unexpected events. Some people get into debt after losing a job or getting very ill. Regardless of the cause, hopefully you are now in a place where you are ready to tackle ridding yourself of this financial burden. This will ultimately save thousands of dollars in interest fees. Here are the 5 steps to create a plan to get rid of credit card debt.

1. Budget your expenses and make sure you live within your means.

This is an obvious one, but it still is amazing the number of people that try to eliminate their credit card debt without having any accounting in place to figure out where their money goes versus how much they bring in.

By ensuring that this step is done, you are confident that you won’t increase your credit card debt month over month. If after this budget exercise, that’s the case, you’ll have to figure out how to decrease your costs. Whether it’s eating out less often or something more drastic like moving into a lower rent location, you will need to make these changes in your life before you can move forward with eliminating your credit card debt.

To learn more about budgeting, check out our guide on How to Budget Your Money.

2. Pay off one card at a time, from highest to lowest interest rate.

If you are having trouble paying off multiple cards, then rather than trying to pay them off evenly, you will pay less in interest if you try to tackle paying off the card with the highest interest rate first. And then move on to the next one from there.

A bonus of doing this approach is that you will feel the momentum at having paid off one card, then the next, and then the next. There will be a satisfaction at having a reduced number of cards carrying a balance month-over-month.

3. Ask if you can get a lower interest rate from your creditors.

It never hurts to ask. One phone call to your credit card issuer often allows you to have a lower interest rate. This typically works better if you have a good credit score already (730 or higher). It’s even better if you are also a long-term customer that typically makes payments on time. Still, it may be worth it to try even if you don’t meet these requirements. Even a decrease or a percentage point or two can add up to hundreds of dollars saved in interest per year.

4. Use a peer-to-peer lender.

Using a peer-to-peer lender means that you’ll borrow money from another service, such as LendingClub.com or Prosper.com. Then, use this borrowed money to pay off your credit cards and get rid of your credit card debt. Then, you’ll just have one loan with an interest rate that is typically around 20% to 30% lower than most credit cards. This can make it easier to track how much you need to pay off per month and also save on interest payments.

5. Make two minimum payments each month.

Maybe it’s easier for you to make the minimum payment on your cards after your paycheck arrives every other week. It’s far better to make two minimum payments each month as opposed to one. For example, if you charged $2,000 on a card with a 17% interest rate and only make the minimum monthly payment, it would take 21 years to pay off the entire balance. But if instead you made an additional minimum payment every month, it would only take 3 years. Every bit counts, even if it doesn’t seem like it. So, consider making payments not just once but twice a month to your credit cards.