There’s probably more on your credit card than you think. Whether you’re shopping for a new credit card or trying to make the most of what you have, here’s what you need to know to optimize your finances and credit score.
1. Most top credit cards offer pre-approval
is a great way to increase your purchasing power and boost your credit score – but if you apply for too many credit cards at once, your credit score could drop. That’s why it’s a good idea to get before applying. A large number of offer pre-approval, which gives you the chance to find out if you’re likely to be a good match before you take the time to complete the application. It also allows you to avoid applying for a credit card and being declined.
2. Your APR could go up or down
are variable – meaning that credit issuers have the power to adjust your APR up or down in accordance with the . Credit card issuers also have the power to apply a if you miss a credit card payment or incur charges that exceed your available credit limit. If you want to reduce the amount of interest you pay on your credit cards, you can , or search for a credit card with a . You can also avoid interest charges by paying off your balance in full each month before your expired.
3. Your credit limit can go up or down
Credit card issuers also have the power to. If you practice Like making on-time payments each month and keeping your credit card balance low, you might be rewarded with a higher credit limit. Some credit card issuers also offer higher credit limits for people who report an increase in their annual income. If you practice , your credit issuer may reduce your available credit. You could also see your credit limit drop if your income drops or if you stop using your credit card for an extended period of time.
4. Your credit card may offer travel benefits
Many credit cards offer perks that can save you money on your next trip or vacation. Theoften come with perks such as free airport lounge access, travel insurance, or statement credits for . The also offer plenty of perks for frequent flyers, including free checked bags and the ability to earn elite status faster. Even a can come with money-saving travel perks, like the chance to earn bonus rewards on dining, entertainment, or gas purchases.
5. You may be able to upgrade or downgrade your credit card
Many issuers offerthat complement their other offerings. This gives consumers the opportunity to choose between , or skipping the annual fee and getting a less competitive rewards rate. In many cases, cardholders can contact the issuer to upgrade or downgrade — upgrade to the annual fee version for or downgrade to the no-annual-fee version if you’re not using the card as much as you’d hoped.
6. Your credit issuer can help you if needed
If you experience unexpected financial difficulties,. All major credit issuers offer hardship programs designed to help people in times of financial need. In some cases, you could get a reduction in your minimum monthly payment. In others, you might receive a lower interest rate. You can also discuss but be aware that consolidating your debt could hurt your credit score.
7. Keeping your credit card account open is important
There are, including the age of your open credit accounts. Many people don’t realize that – especially an old credit account – could have a negative impact on their credit. It’s also a little known fact that if you stop using your credit card for long enough, your credit issuer could begin the process of closing the account. That’s why it’s good to use each of your credit cards regularly. Consider putting a monthly subscription service on your least-used card and using pay your balance in full each month. This way you can keep your accounts open and continue to build a positive credit history.
The bottom line
Once you understand how credit cards work, you’ll be able to get the most out of each of your cards, whether you’re maximizing rewards, boosting your credit score, or using your credit card’s travel benefits on your travels. next big adventure. Want to know more? We have a guide to help you— and if you’re ready to apply for a new card, we’ve got a guide to help you .
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