Published in: Credit Cards | July 29, 2019
By: Maurie Backman
Many of us who hold credit cards don't interact with the issuing companies behind them all that often. Generally, we only call our credit card companies when there's a problem, or when we need extra help or information. But while you may not be in the habit of reaching out to your credit card issuer too often, it pays to pick up the phone once in a while and ask for a few allowances. Here are three to think about requesting.
The higher your credit limit, the more flexibility you have to charge expenses as needed. That can be a good thing and a bad thing. Having a higher credit limit opens the door to overspending, and if you go that route, you risk carrying a costly balance with mountains of interest attached to it.
On the other hand, a higher credit limit could help you in a couple of ways. First, it could serve as your safety net in the event of a true financial emergency. Granted, you should have at least three months' worth of essential living expenses in a savings account to pay for unplanned expenses you can't put off, like home or car repairs. But if you don't have an emergency fund, it helps to have the option to charge unanticipated expenses and, ideally, pay them off quickly.
Furthermore, increasing your credit limit could help your credit score improve. One major factor that goes into calculating your credit score is your credit utilization, or the percentage of your available credit you're using at once. It's important to keep your utilization to 30% or less, which means that if you have $10,000 in available credit, you shouldn't have more than $3,000 in charges outstanding. If you have a $4,000 balance, you're at 40% utilization, which could bring down your score. But if you get your $10,000 credit limit raised to $12,000, you're back in favorable territory, which is why it pays to ask for a higher limit, even if you don't actually plan to use it.
Your APR, or annual percentage rate, is effectively the interest rate you pay on your credit card balance. The lower that rate, the less your credit card debt will cost you once you rack some up.
Now ideally, you should only be charging expenses on a credit card that you can afford to pay off by the time their associated bills come due. But sometimes, life happens, and if you're forced to carry a balance, having a lower APR could make it easier and cheaper to pay it off.
You've probably noticed that your credit card billing statement closes on the same date each month and is due on the same date each month. But if that cycle doesn't align well with how you get paid, it could make it difficult to stay on top of your bills.
Let's say your current billing cycle ends on the 10th of each month, with your bills being due on the ninth of the following month. If you typically don't get paid until the 15th of the month, however, that gap could put you at risk of failing to pay your bills in full. Rather than let that happen, it makes sense to ask to have your billing cycle adjusted.
Now you may be thinking, "Why would my credit card company accommodate any of the above requests?" The answer is simple: If you've been a good customer who pays his or her bills on time (even if just your minimum payments), then your credit card company will want to keep you on board. As such, it may be willing to agree to any of the above demands -- especially a billing cycle change.
Furthermore, if your credit score has improved since you first applied for your card, its issuer may be more than willing to grant you a higher credit limit and lower its APR. As is the case with many things in life, if you don't ask, you don't receive, so if the above changes would benefit you, there's no harm in requesting them.
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