Credit Card Secrets: 3 Things Your Card Company Would Prefer You Didn't Know

I’ve been in the credit card comparison business for a while now. I’m generally very pro-plastic — in my own life, I use credit cards almost exclusively, and only rarely use a debit card or cash. The benefits simply outweigh the risks: added purchase protection, an interest-free loan from the bank (provided you pay your entire balance off before the due date each month), cash back or air miles, and the list goes on…

Over the years, I’ve found out a number of intriguing “secrets” about the industry. Here are a few of my favourites, I hope they help you out! (And be sure to peruse this week’s newly posted credit card deals over in our deals portal — there are some great offers available this summer.)

Secret #1: The annual fee is not set in stone. So you’ve been using a great card for a couple years now, and one day you receive a letter informing you the account will have a $59 annual fee moving forward. You want to keep your account open, but you don’t want to pay the fee, and would rather close the account and find a new card than pay for the “privilege” (sarcasm quotes there!) of using a credit card.

Call up the number on the back of your card and explain your situation. Tell them you want to close the account if the annual fee cannot be waived. In most cases, if you’ve been a profitable customer over the years, the bank will gladly waive that fee — it typically takes a bank hundreds of dollars in marketing costs to acquire a new credit card customer, so they don’t want to lose your business over a trifling $59 fee.

Of course, if you’ve been a bad customer (e.g. making no money for them, or you’ve become a high risk customer by missing payments repeatedly), they may not extend this offer to you — the bank would prefer you to pay off your existing balance, close the account, and go elsewhere.

Secret #2: Banks do look at your “profitability.” Over the years, I’ve heard from a couple folks who had excellent credit and sufficient personal income, yet were turned down for credit cards. Upon closer inspection, these customers might have been “too responsible” for the bank’s tastes.

If you’ve had credit cards for 10 years, and have NEVER paid a penny of interest nor any kind of annual fee or cash advance fee, the bank knows you aren’t likely to be a profitable customer for them.

This may sound “messed up” that banks turn away responsible folks, but think about it from their perspective. They don’t lend for charity’s sake. They lend to make money. And if they have concrete proof that you have never added a cent to the bottom line of any card company, you aren’t terribly attractive to them.

Luckily I don’t have this problem. Even though I always aim to “practice what I preach” and pay off my balances in full each month, there have been times where that wasn’t possible — and the bank made some interest income off me as a result. So when I apply for a card, they know there’s a chance they could make money off me over the long haul. 

Secret #3: Take advantage of awesome, little-known cardholder benefits! Read your cardholder agreement and summary of benefits very closely. Especially if it’s a high-end travel rewards card, you may be entitled to such things as travel cancellation reimbursement, enhanced rental car insurance, etc.

Few customers know about these perks, and use them, which is why banks can offer them. Get the most from your card by using these complimentary benefits whenever you travel. 

Speaking of travel services, if you lose your card, many companies will now overnight a new card to you free of charge if you call in and ask for “expedited shipping” on your replacement card. Citi, Chase’s Sapphire Card, and American Express all do this if you ask for it, in my personal experience. Your results may vary!

— provided by Outlaw; see more deals in our card offers portal.

Disclosures: We’re a credit card offers site, so obviously we maintain financial relationships with numerous banks and financial institutions, including some of the card issuers mentioned in this article. No relationship or position on Capital One, Citigroup, or JPMorgan Chase at time of publication.

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