Make that credit card work for you

The savviest credit card holders know how to use those 'evil' credit card companies to their advantage, playing them like a fine Stradivarius.

By MSN Money Partner Nov 4, 2011 12:28PM

This post comes from Len Penzo at partner blog Len Penzo dot Com.


Sitting on the edge of the Sonoran desert, along the main highway between Los Angeles and Palm Springs, lies Hadley's, a popular fruit stand and tourist stop that sells, among other things, banana date shakes.


I love 'em. They're an incredibly tasty treat -- especially on hot, arid summer days.


Don't tell that to my 12-year-old daughter, Nina, though. She hates banana date milkshakes; claims the mere sight of them makes her gag.


What's really funny is Nina swears that the only thing worse than a banana date shake is escargot -- although she's never tried either of them. I know.


My daughter is no different from folks who stubbornly refuse to try credit cards for the first time. They're certain that credit card companies take advantage of consumers. They think nothing good can ever come from credit cards -- nothing! -- and they know this because, well, somebody told them so. Heh.


If they only knew what they're missing.


Fiscally responsible people don't fear credit cards and the companies that issue them. They embrace them.


The savviest credit card holders know how to use those "evil" credit card companies to theiradvantage, playing them like a fine Stradivarius. I know I do.


The reason we can is because the competition for credit card customers is extremely fierce, as evidenced by my chronic junk mail problem. Until I got it under control I used to get two or three credit card offers from companies vying for my business every week. That rabid desire to gain -- or hang on to -- customers puts us firmly in the driver's seat, folks.


With that in mind, I try to take advantage of my credit card company as often as I can -- and I do so without feeling the slightest hint of guilt. Here's several ways you can too:


Take advantage of their ludicrously large signup bonuses. In the world of personal finance, patience is a virtue. For months, Marriott had been trying to lure me to sign up for their rewards card. In January, they offered me 40,000 points. By June, they had upped the ante to 50,000 points. I finally bit after they incredibly sweetened the pot to 70,000 points. Chumps! Post continues below.

Demand a lower interest rate. That's right. If you've been a good customer, by all means, call up your credit card company and ask them to lower your interest rate. Odds are they'll cave. But if they balk, tell them you're going to close your account and ...


Transfer your balances to a new credit card with a 0% APR. If you're already carrying a balance on your other credit cards -- and paying high interest rates in the process -- then make sure you get the last laugh by finding a new card with an introductory 0% APR that allows you to transfer the balances.


Have customer service waive your interest charges and fees. Last year I was charged $107.47 interest when my credit card company received the payment after the grace period. Since that was only my third or fourth late payment in 20 years, I asked them to waive the charges. They did. Pushovers.


Avail yourself of their concierge services. Higher-end rewards cards offer fabulous concierge services that will virtually bend over backward to help their members with almost any request they can think of -- everything from securing last-minute dinner reservations and hard-to-find concert tickets to happily hunting down giant tubs of nacho cheese sauce. And they say credit card customers are the easy marks. Right.


Tell them you want a higher credit limit -- without pulling your credit. If you need a little more credit for, say, a vacation, ask your credit card company if they'll raise your limit without making a credit inquiry -- which usually affects your credit score. You'll have more leverage if you've been a longtime customer with good credit history.


Take advantage of their free extended warranty plans. Because it results in more business for them, many -- but not all -- major credit card companies eagerly play the fall guy by offering free extended warranty protection. Yes, free. For example, all products purchased with an American Express card automatically receive an additional year of protection beyond the manufacturer's warranty.


Take advantage of their free insurance. Most credit cards offer at least secondary rental car insurance that will cover what your auto insurance doesn't if you get in an accident in a rental car. And higher-end credit cards provide other kinds of insurance too, protecting you from unforeseen events like lost baggage and even canceled trips.


Always pay off your credit card bills in full each month. By paying off your credit card balance in full each month, you'll avoid wasteful interest payments that can be used for more important things like building your retirement nest egg. And don't worry about the credit card companies; they'll still make plenty of money off the fees they charge merchants whenever you use your credit card.


Even if you use it to buy a banana date milkshake -- or a plate of snails.


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