Get Paid to Close a Credit Card Account

Yahoo Finance has the news, “AmEx paying card holders to close their accounts“.

What an odd thing. Certainly, a sign of our times. American Express Co is apparently offering a limited number of card holders $300 if they will pay off their balances and then close their American Express accounts.

So, if you’ve got an AmEx card you’re not using and don’t mind trading it in for $300.00, you might call the 800 number on the back and see if they’ll buy your account.

The Schumer Box

Many credit card customers tend to dislike credit card companies.  By raising interest rates and increasing fees at will, credit card companies have all the power in the relationship they have with credit card customers who use credit cards.  Much of the news about credit card company behavior shows them as excessively one-sided and selfish.  However, credit card companies are required to declare the rates, fees, billing practices and triggers for increases in rates or fees on every credit card application.

This information is provided in the “Schumer Box”, named for Sen. Charles Schumer (NY) who sponsored the law in 1988 which requires credit card companies to declare certain information in a simple format in every credit card application in the “Schumer Box”.

CNN and Money.com offer a great article explaining how to use the information in an application’s Schumer Box to determine if the credit card offer is a rip-off.  The article is easy to read and guides the reader through each of the Schumer Box features.  For more information, read “How to spot a credit-card rip-off“.

Schedule Automatic Credit Card Payments

How do you avoid making late fees on your credit card accounts?  Make credit card payments on time.

How do you make sure you’re never late?  Schedule automatic credit card payments.

Most credit card companies allow card holders to schedule automatic payments that are deducted from a checking account.  While you might be concerned about giving your credit card issuer access to your checking account, if your credit card issuer allows scheduling automatic payments with a preset amount, this limits the monthly payment to the amount you authorize.

Scheduling automatic payments prevents you from paying late and incurring a late payment fee.  If your credit card issuer allows it, automatic payments can make your financial life a little bit easier.

Credit Card Convenience Checks

You have probably received credit card “convenience” checks without requesting them.  They may have arrived with your monthly statement.  Or maybe they arrived all by themselves before school starts, before Christmas or anytime your credit card issuer wants to generate additional revenue.

And they probably came with an enticing, inviting letter containing a compliment similar to, “Because of your good credit, you deserve these convenience checks.”

Credit card convenience checks are mostly convenient for your credit card company.  For card holders, the checks hold more risk than reward.  Here are some tips about protecting yourself from the potential negative outcomes of credit card convenience checks:

• Ask your credit card issuer to quit sending them.
• Do not throw them in your trash for someone to find.  Shred them.
• Before you use them, say to yourself, “This is debt.”

Paying Your Credit Card Bill Online

Paying your credit card bill online is actually a good thing for most credit card users.

First, remember a late payment dings your credit score.  Mail travels at varying speeds and even gets lost.  (Though I don’t believe this happens as often as credit card companies hear this as an excuse.)

Online credit card payments generate a verification code.  Once your payment is made or scheduled, you will receive this code.  Keep it.  It’s proof your payment was made and verifies the time.  As one credit card company advertises, “Paid online is paid on time.”

Second, while most credit card company’s offer to suspend your paper statements once you begin paying online, I recommend you continue to receive paper statements.  Believe me, you’re paying for them, and if you ever need paper, electrons may not be a good substitute.

Third, take care of computer security.  Be certain the computer you use is secure and without viruses or malware.  Don’t use the same user name or password for different accounts.  Avoid using a publicly-accessed computer.  Take all the precautions necessary to ensure your electronic transaction is protected from hackers.

Fourth, verify you have enough funds available in your checking account to cover your payment when you click, “Pay Now”.

Other benefits of paying your credit card online are that you can do it without going to the post office or mail box, you can usually schedule payments in advance, you have access to a lot of information about your account when you log in and in most cases can easily review a history of your payments and transactions.  You can even schedule email reminders about upcoming payments or cautions about credit amounts, ala “your balance is now over $800.00″.

It’s Really a Debt Card

The term “Credit Card” begs a question: why is it not called a “Debt Card”.  It was a brilliant marketing move to avoid calling them what they really are: Debt Cards.

Here’s an idea that you might find helpful.  The next time you take out a credit card, look at it and think to yourself (or say it aloud if you think it will help), “This card in my hand is a Debt Card.”

Sure the bank offers you credit, but once used, it is absolutely debt.  Teach your children to call them debt cards, too.  They may thank you for it in the future.  Think, “This card in my hand is a Debt Card.“

Best Credit Card Practices

Credit cards are like fire.

Use them wisely and you have a tool that enhances your ability to accomplish things.  Use them unwisely, and like those who play with fire, you’ll get burned.

Using credit cards wisely requires that faithfully do the following.

1.  Always pay on time.
2.  Pay the balance in full each month.
3.  Always pay at least the minimum balance if you can’t pay the balance in full.

If you pay late, you’ll get burned with late fees.  Pay too late and your interest rate will increase.

If you fail to pay the balance in full each month, you’ll pay interest.  If you use your card for unnecessary things like coffee or eating out, you’ll pay more than the drink or meal was worth.

If you pay less than the minimum balance, at a minimum you’ll get burned with an higher interest rate and a rising balance.

Your Monthly Credit Card Question

If you pay your credit card at least monthly as most credit card agreements require, there’s one more thing you should do each month if the interest rate on the account seems too high: Ask for it to be lowered.

Make this your monthly credit card question: “Would you please lower my account’s interest rate?”

It won’t hurt to ask each month until your rate is reduced to something that you think is correct for your credit history. And even if you have a poor credit history, it won’t hurt to ask.

On the back of your credit card you will probably find a toll free phone number. If it’s not there, it will be in the monthly statement you receive. Call this number and be prepared to provide your credit card number, name and identifying information. When the customer service person asks how he or she can help you, ask politely, “Would you please lower my account’s interest rate?”

It’s that simple.

Don’t be disappointed when the answer is, “I’m sorry. You have the best rate we can offer,” or something similar. The chances are good you’ll need to call several months in a row (all the while making payments as you should) before you receive a positive response.

But when you do get your rate lowered, it will be a good thing.