6 times when it’s smart to call your card company
No one likes calling their credit card companies, but sometimes, it can pay off.
Here are six times when calling your issuer is worth the effort:
1. When you forget a payment
It happens to the best of us — even people whose job it is write about credit cards. In fact, I was guilty of this just last month. I recently opened up a line of credit with Home Depot to buy a new dryer and figured I might as well take advantage of the six-month interest-free period rather than take a big chunk from my savings. As I waited for that first bill to come, I kind of forgot about it until I found it stuck to another piece of mail I had put aside. The due date had passed.
What to do: I called and explained about my embarrassing mistake, promised it wouldn’t happen again and said I planned to make a payment above the minimum. The customer service person let me know that they have a one-time forgiveness for a new account and that the late fee would be waived. Because it was only three days late, it wasn’t reported to the credit bureaus. Whew — crisis averted! Once the call was done, I set up my auto payments so that the balance will be paid off before the introductory period of zero interest is over.
Your mea culpa will also make it less likely that the issuer will impose an extra penalty, like hiking up your interest rate.
2. Before you go on a trip or huge spending spree
A friend of mine recalled the time she went to Ireland and had her card declined when she tried to rent a car. It was because the bank flagged the activity as a possibly fraudulent charge since she was out of the country. She was able to resolve the problem on the spot, but it cost her a hefty fee for the international call she had to make from her cellphone.
What to do: Before you’re about to use your card in a way that’s not typical for you, take a minute to alert your card issuer so that it can make a note on your account. Let the issuer know in advance your travel dates or if you’re planning to make a very large charge on the account .
3. If you’re confused
Whether you’re having trouble redeeming points or don’t know what kind of rental car coverage you have, just call.
What to do: Make a list of questions and get them all answered. You might just find out that you have thousands of unredeemed points or that you can stop paying for extended warranties because your card covers you.
4. To cash in on your good behavior
If you’ve been a loyal customer, and your credit score is in better shape than it was when you opened the card, don’t wait around for a gold star. Ask if you qualify for a lower interest rate or can get your annual fee waived. A recent CreditCards.com survey found that 65 percent of people who asked for a rate reduction got it.
What to do: Explain that you’d love to continue using the credit product, but are hoping the issuer will consider lowering your interest rate because of your strong history of on-time payments and stellar credit. Trent Hamm of The Simple Dollar offers a simple step-by-step on how to get creditors to say yes.
5. If you’re facing a crisis
It could be worthwhile to reach out to your creditors if you’re going through financial difficulty. Right after Super Storm Sandy, my mother’s card company sent an email blast to customers in her geographic area since it was hit hard, saying to contact them if they needed assistance. My mom, who had significant damage to her home, called and the card issuer ended up offering her several months of zero interest on any purchases made on appliances or other items she needed to replace. This saved her a nice amount of money since she was able to get what she needed, and then pay off the balance once her insurance claim came through.
What to do: If you come on rough times, be forthright with your creditor. It may be able to offer a small gesture such as giving you a one-time due date flexibility or waiving a late fee if, for instance, you were in the hospital and missed a payment. Every little bit helps.
6. If you suspect something fishy is going on
The minute you see a charge you don’t recognize, don’t hesitate to call. First, though, track back through your spending to see if there was a purchase you forgot about (maybe something auto-renewed, for instance). Particularly take note of small charges — scammers hope you won’t notice.
What to do: Someone in the fraud department can help you determine if further action needs to be taken.
Picking up the phone is often the biggest hurdle. But in my experience, if you’re pleasant to the person on the other line, they’ll be more than happy to help you resolve your issue. As for the cheesy hold music, you’ll just have to deal with it.