5 Habits of Highly Effective Credit Card Users

Everyone starts out as a beginning credit card user at some point. Later, as we start to get the hang of managing our accounts, we end up at sort of an intermediate level. Most of us are satisfied to be proficient, but some credit card users strive to take their credit card usage to the next level.

Here are five things that these superusers do to rise above the rest.

1. Maximize rewards the way investors maximize returns.

Above-average credit card users avoid interest charges by paying their statement balances in full and on time, every month. Once they are in this habit, the next step is to start hunting for the most valuable rewards in the form of points, miles and cash back. The best rewards card users will have a small portfolio of different cards, each offering elevated returns for the kind of purchases they make most.

2. Never pay a fee without asking for it to be waived first.

The smartest credit card users know that their business is very valuable. Why else would their mailboxes be stuffed with offers for new cards? To leverage their loyalty, the best credit card users will find a way to wiggle out of most fees. For example, card issuers will gladly waive an occasional late fee, and even annual fees can be somewhat negotiable. The key to having an annual fee waived is to speak with a representative in the “retentions” department that can waive the fee to keep you from closing your account, or at least offer the equivalent value in the form of rewards.

3. Ask for reconsideration when rejected for a new card.

Savvy cardholders seek the best cards with the most generous sign-up bonuses. Sometimes, card issuers will be reluctant to approve these cardholders, who may have recently opened several other accounts. Yet the real pros know that you can call your card issuer and ask a human to reconsider your application that was rejected by their computer. Perhaps you can cite additional income that was not included in the application, or maybe you can offer to re-allocate some of your credit line from an existing card. If the bonus is attractive enough, skilled credit card users will go to nearly any length to be approved for a new account. They also keep an eye on their credit scores (you can get two free credit scores on Credit.com, updated every 14 days) and apply only for cards they are likely to qualify for.

4. Carefully manage purchases near closing dates.

One of the valuable things about credit cards is that they offer a free loan to those who avoid interest charges by paying their balances in full each month. The length of the loan depends on how many days are left in the account’s monthly statement cycle, plus the length of the card’s grace period. So if a charge is made the day before the statement cycle closes, it will have to be paid off in as little as 21 days to avoid interest charges. But if it is charged just after the statement cycle closes, cardholders will have at least 51 days. By knowing exactly when the statement closing date is, the most clever cardholders can time their largest purchases to maximize this benefit.

5. Go into stealth mode before applying for a mortgage.

Master credit card users know that some of their best tricks don’t look too good on a mortgage application. So in the months leading up to a home purchase or refinance, they will stop applying for new cards, and keep their account balances very low. Also, your credit card minimum payments will factor into your debt-to-income ratio, and can limit how much house you can afford as well. It can even be a good idea to pay down a balance before the statement closes, since unpaid balances appear as debt on a credit report until the next statement is issued.