Getting a new credit card? Six questions to ask your issuer.
Actively managing your credit card account can save you money, improve your credit scores and help you manage your overall financial life. If there鈥檚 something your credit card issuer can do to make things easier, it never hurts to ask. You might聽be surprised at what they鈥檙e willing to do to give you a little help.
Here are six questions to ask your card issuer. The worst thing that can happen is you get a 鈥渘o.鈥�
1. Will you forgive a late payment?
Obviously, paying on time every month should be a priority 鈥� but sometimes life takes a sharp turn.听Say you miss your聽聽for some reason. 鈥淚f you have a good record with your credit card company, and you miss a payment due to illness or moving or something, ask them to let it slide and ask to have the fee removed,鈥� says Beverly Harzog, credit expert and author of 鈥淭he Debt Escape Plan.鈥�
Some card issuers make forgiveness a policy. Others give their cardholders tools to make late payments less likely.
Discover, for example, doesn鈥檛 charge a late fee on the first late payment or raise your interest rate, says spokesman Derek Cuculich. 鈥淲e do not have a penalty APR, so the second missed payment would not result in a raised APR, but it would come with a fee.鈥�
Citi offers聽聽that聽doesn鈥檛 charge late fees or a penalty annual percentage rate聽even after multiple late payments.
Capital One is trying to make sure customers don鈥檛 pay late. 鈥淎bout a year ago, we automatically enrolled every customer in the payment-due alert,鈥� says Jennifer Jackson, managing vice president of Capital One鈥檚 U.S. card division. 鈥淲e鈥檙e designing products and services to help our customers succeed. We鈥檙e measuring the impact, and we know that it鈥檚 impacting customer behavior.鈥�
Even if you do get a late fee set aside, be aware that the missed payment itself could still be reported to the credit bureaus, which would hurt your score. Usually, payments are reported to the bureaus once they鈥檙e 30 days late. Whatever happens,聽consider it a learning experience and work to avoid聽repeating the mistake. Paying late is a terrible habit to get started.
2. Can I choose聽my payment due date?
One of the best ways to ensure聽you pay on time while聽managing your cash flow聽is to choose聽the聽date your payment is due each month. When you can pick your own due date, you can set it for a time when money isn鈥檛 as tight. All major聽card issuers allow you to choose your own due聽date; some even let you do it online.
鈥淲hen people can change their payment due date, they can set it to stay on track with their overall finances,鈥� Jackson says. 鈥淭hey can decide how they want to manage payments.鈥�
One thing to be aware of:聽You usually can鈥檛 choose a due date of the 29th, 30th or 31st because not every month includes those dates.
3. Will you lower my interest rate?
If you鈥檝e been a good customer and you鈥檙e carrying a balance, consider asking your issuer to lower your interest rate. Harzog says there鈥檚 another signal that聽it鈥檚 time to ask for a lower rate: 鈥淚f you start getting offers in the mail for premier cards, it means your score has probably gone up. You can call your issuer and tell them the offers you鈥檙e getting, and leverage that to see if they can match it.鈥�
4. Will you raise my credit limit?
You can always ask for an increase in your credit limit 鈥斅燽ut be sure you know both the upside and downside. A higher credit line gives you access to more borrowing power, and it can improve your credit score by lowering your聽. The downside is that the issuer may pull your credit report, which could ding your credit score.
鈥淵ou can decide whether you want to take that short-term hit to your credit,鈥� Harzog says. 鈥淚f you鈥檙e close to the next level up 鈥� from average to good, for example 鈥� a hit of even five or 10 points could hurt you, especially if you鈥檙e planning to apply for a mortgage or other large loan.鈥�
Asking for a credit line increase can also produce unintended consequences. Harzog says she knows someone who asked for a credit line increase聽and it backfired. 鈥淲hen the issuer looked at his credit history and saw some black marks, they actually decreased his credit line. If you don鈥檛 have a good record, you don鈥檛 want to ask them to look at your credit account.鈥�
Many times, issuers have mechanisms聽in place to聽boost your credit limit when they think you鈥檙e ready.
Jackson says聽Capital One has a 鈥渃redit steps program鈥� to increase customers鈥� credit limits. Customers 鈥渉ave to do two steps to get a credit line increase,鈥� she says. 鈥淯se your card, pay on time for the first five statements, and on the sixth statement you will get a credit line increase. We continue to evaluate accounts over time for additional increases, looking at on-time payments and the ability to pay. We want to make sure our customers won鈥檛 inadvertently get into trouble. And we don鈥檛 extend lines where we don鈥檛 think they will ever be able to pay it off.鈥�
5. Which credit score do you聽use?
To reduce your chance of having a credit card application rejected, check your credit report and credit score聽. These days, you can get your聽聽from many credit card companies. Discover and Capital One will give you your score even if you鈥檙e not a customer. Once you know which card you want, call the issuer to see which score it聽uses when considering applications.
Here鈥檚 why it matters: Each credit bureau collects its own information and calculates scores based on that information, so scores can vary from one bureau to another.
鈥淵ou can ask which bureau they pull from,鈥� Harzog says. However, she adds, 鈥淚鈥檝e noticed in the past few years, some issuers have changed their policy and don鈥檛 tell you. The best strategy is to be sure all your credit reports are good so you don鈥檛 have to worry which bureau is being pulled.鈥�
Federal law entitles you to a free copy of your credit report from each of the three credit bureaus once a year. You can access those free reports at聽.
6. When do you聽report account information to the credit bureaus?
鈥淚f you鈥檙e trying to raise your score, paying off your credit card balance before the issuer reports it to the credit bureau will help by lowering your utilization ratio,鈥� Harzog聽says.
Call your issuer and ask when it聽reports account information. If you don鈥檛 want to call, your best bet is to assume it reports that information on your聽statement closing date, which聽you can find on your statement. It could聽take a few days for the credit bureaus to update their data. If you鈥檙e working hard to raise your credit score, another alternative is聽to pay your credit card more than once聽a month so your utilization ratio is lower throughout the month.
The common thread of these six questions is this: Getting the most out of your credit cards means managing your accounts so they put you in the most advantageous position. Don鈥檛 just passively accept what your issuer gives you. Ask your issuer to work with you to produce the聽best financial results for your situation.
Ellen Cannon is a staff writer at NerdWallet, a personal finance website. Email:聽ecannon@nerdwallet.com. Twitter:聽.
This article first appeared in .听
