I just added a category for those who want to “Stretch their Dollars”, and I will post various ways I try to (and have in the past) stretch my dollars.
For those with good credit (must be in good standing), you can still try this and see how much pull you have. First, I would define “good” credit in this scenario as better than 700 score and no past due or negative marks.
You should always be working to get the lowest interest rate possible. Do a little research to find the best rate being offered and work towards that. To help you get to that point, it helps to buy as many daily items as possible on your credit. However, you must always put that amount aside so that you can pay off that amount each month.
The goal is to pay more than the minimum while still carrying a small balance. This tells creditors that you are a good credit risk and let’s them “earn” something on your balance -even if it’s a tiny amount.
However, the ultimate situation is to be able to buy everything on credit (i.e. building your credit) and not pay any interest. The key here is to get a credit card offering 0% interest for X months.. That may be easier said than done, so this may be where you have to wait. If you cannot obtain a 0% introductory rate card, you should begin practicing the previous tip and budget for what you buy each day. At the end of the month, pay that amount off -plus a few bucks extra if you can spare it.
However, if you are able to get a card with a 0% introductory rate (or have one that’s about to expire), you should call up the company and request to cancel your card. Don’t worry, you’re not actually going to -unless you want to! We’re just going to let them know we want to cancel and see what they offer to stay. In most cases, they will transfer you and ask you what they can do to keep you. That’s simple, you just say “well, I do like this card but I’ve got too much open credit. Would you be able or willing to extend the 0% intro rate?”
They may hesitate, but in the end, they should do it. If they don’t bend, and you don’t want to cancel the card. Just tell them you want to think about it a little more (but not “changed your mind”). They may send you an offer in the mail, if you’re lucky. For me, this method worked to get me 0% interest for 2 years on one card and 0% interest on another card for 1 year. In that time, I built my credit up for free and achieved a 790 by that point.
Then, I was able to get a much better card at 0% for 6 months at 9.99% APR instead of the 14.99% I had before. I then closed the other card. So, I paid no interest at the 14.99% rate and then got a great rate on a new card after it was all said and done. I had a fairly large balance on the original card, so I used a convenience check from the new card to transfer the balance. Back when I did it, companies were offering $75 maximum fee per check but I think they did away with that now.
At any rate, I hope that helps.
For a future article, I will write about how to get credit cards if you have ZERO credit or bad credit. There are a few guaranteed methods but you have to be careful. Done right, you can really get back on your feet.
Update: Here’s the first article in the series I titled,
“Building ‘Secured’ Credit - Part 1: Bank Accounts“
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