5 Ways To Screw Your Credit Card Company

Credit card companies can be sneaky sneakers. They have trickster ways that entice us to spend more, pay off less, and dig ourselves deeper into credit card debt. Years ago when I clued in and figured out how my credit card company was pocketing my pay check, not only did I beat $17,000 of debt but I stopped screwing up my financial future by learning to stick it to my credit cards.

Sure, it’s not hard to get tricked by credit cards. With all the enticing minimum balance payments, high interest rates, and ease of use it’s pretty darn easy to fall prey to the power of plastic.

credit card bad credit credit cards

But unless you love paying the price for plastic, it makes good financial sense to get wise to the credit card game. Using your credit card the smart way and avoiding the common pitfalls will not only save you lots of money but might just screw over your credit card company and prevent them from getting your cash. You won’t feel bad, promise. Here are 5 legal ways to screw your credit card company:

1. Pay More than the Minimum Balance

If you’re stuck for the month and can’t pay off your credit card balance in full, then aim to pay more than the minimum balance. Paying the bare minimum on your monthly balance only prolongs the debt agony and increases the amount of interest you pay to the credit card company — and that’s how to get screwed! :(

Depending on the size of your debt, you may add thousands to your wallet each year by adding a few more dollars to your monthly payment. For example, on a starting balance of $2,200 with an annual interest rate of 18%, your debt would be paid off in 8 years and 6 months if you paid only the minimum balance of 4% of the initial balance. The total interest paid is a massive $1,193.54 on an initial loan of only $2,200. If you can’t pay your card off in full each month, try to at least double the minimum payment so you’re actually taking a bite out of the principal.

Want to see how much paying the minimum balance is costing you? Check out this handy Credit Card Calculator for the scary results. You might be shocked!

2. Pay Credit Card Balances in Full

Fully paying off your credit card each and every month is a sure fire way to screw the credit card company. With some credit card interest rates well over 18%, it’s easy to lose a bundle by not paying off monthly balances. It just makes good financial sense to keep that money for yourself — you worked hard to earn it after all!

Besides, paying off your credit card balance in full helps you to establish a good credit rating, improve your credit score or FICO score, and build an excellent credit report for lenders to reference if you’re in the market for a mortgage or a loan.

If you need convincing, here’s a 5 Minute Guide to Your Credit Report and Credit Score to get you thinking seriously about paying off your balances.

3. Pay in Cash

Skip plastic altogether by spending what you have, not what you hope to have in the future. By keeping honest with your cash on hand you won’t be borrowing against your future to deal with high interest credit card debt.

Besides, sticking to a planned spend rather then getting seduced by a sexy sales sign is how to win the credit card battle and ultimately win the war against plastic. If you’re feeling the call of plastic over cash, then try posting a sticky note on your card with a reminder not to spend beyond the cash you’ve set aside.

4. Negotiate a Lower Interest Rate

If you’re carrying a balance on your credit card, don’t be afraid to call your issuer and ask for a lower rate. Many lenders will cut you a break if you’ve been paying the minimum balance each month, and they may reduce your monthly interest rate if you ask nicely.

It costs you nothing to pick up the phone and negotiate a lower interest rate with your lender and could help you pay off your credit card sooner. A cut in rate from 22.5% to 15% on a $5,500 balance could save you almost $500 a year!

It’s the new math people — be a kind a courteous bill payer, ask for a better interest rate, and then kindly kill your credit card debt faster.

5. Students — Stay away from Free Frisbees!

Don’t get hit in the head with a piece of flying plastic by signing a new credit card application on campus. Credit card companies love to entice fresh-faced college students with free stuff like T-shirts, food, and Frisbees in exchange for a student credit card. These plastic peddlers often set up booths on campus to get your attention and to get you spending on credit sooner. Do yourself a solid and take a pass on this collegiate debt game play.

If you need a credit card while studying at school, ask your parents for help with finding a good lender and get an education in paying off the balance. There’s no sense in getting schooled by debt and getting taught a lesson in credit when you’re just looking for a way to pay for tuition.

There must be countless ways to win the war on credit cards so I might just add to this list in a later post. :)

UPDATE: Read Part Two: 5 MORE Ways To Screw Your Credit Card Company

Penny for your thoughts? Got another way to politely screw your credit card company and pay off your plastic debt sooner?

Your two cents:

  1. Credit Card Chaser November 19th, 2009

    #2 is the absolute most important way because then if you can discipline yourself to pay off your balance in full every month then you can use a cash back credit card or a rewards credit card to really sock it to the credit card company and earn all kinds of cash back and rewards.

  2. Alli November 19th, 2009

    Use your credit card for monthly bills, if possible, and rack up points (w/Capital One for example) and get a free flight every once in a while. It saves on buying new checks and you WERE going to pay those bills any way.

  3. Hope to Prosper November 19th, 2009

    It seems like a small victory. But, I like to pull into the gas station, push the Credit button and then use my debit card.

    That way, I save the transaction fee and I avoid interest.

  4. Jean-Louis November 20th, 2009

    Very good article !!! I only use my credit card when paying in cash is not a valid option (like buying something online) and pay it back in full at the end of the month. That being said, the companies also offer a “protection fee” plan in case you loose your job. By not spending more than you can afford, nobody needs to pay these extra dollars each time you use you credit card. :)

  5. Carol November 20th, 2009

    One thing I learned from running a business is that the money you spend for each purchase you make with a credit (or even a debit card) does not go to the buisness. They get charged a 3-5% service fee (AmEx is the highest). When shopping at my local businesses and mom-and-pop stores, I try to either write a check or use cash. This, in the end, helps lower their costs and may result in keeping prices lower.

    That is also less money in fees going to the credit card companies. That part I like the most.

  6. Greg November 20th, 2009

    Get a free rewards card, like the ones from CitiBank, MBNA and Costco AMEX (i.e. no yearly fee).
    I use my credit card for everything and I get about 1.5% cash back on my purchases. I also only buy things that I already have the cash to pay for so when the bill comes, I just pay it in full. This way, the credit card is actually giving me a discount on everything I buy.

  7. Tina Fortune November 22nd, 2009

    #2 has become my new rule! Since I’m entering into 2010 without cc debt, I am back to my original envelope system with cash.
    @Jean Louis – good tip…I need to remove that “protection” from my cards
    @Carol- I do that too (no checks for me though)
    @Greg-yep, I use my cc for big purchases for the protection and free airline tickets
    Great post!

  8. Kate November 22nd, 2009

    #2 combined with a good rewards program credit card = strategic credit card use that can earn you a lot of value each year, either in cash back or reward points for travel miles, lodging, store gift certificates, etc. That’s the very best way to stick it to the credit card companies, IMHO.

  9. ravi November 22nd, 2009

    I love cc’s its easy and global in nature, but I have ALWAYS paid all my cc debt unfailingly on time and 100% balance and never paid interest…i have also gained quite some $$ back from them …which has been a big bonus for me and fmly…i wish more americans would show some restraint in spending beyond means…

  10. Vi Wickam November 22nd, 2009

    #2 is the only way to live. If you aren’t familiar with Dave Ramsey, you should be.

    Everything is better when you are living debt free!

    Here’s to debt free living!

  11. Mike November 23rd, 2009

    Thanks again for another outstanding article. It’s a shame that some many of us are convinced that we need a credit rating to have a life.

  12. Stephen November 24th, 2009

    My favorite way of getting back at credit card companies involves their unsolicited mail.

    Next time you get an application for another credit card, write, “No thanks” on the application in huge letters, take all of the contents they sent you and stuff them in their postage-paid envelope, and send it all back to them.

    After doing this a couple of times, they’ll take you off their mailing lists.

  13. Marilu Gamboa November 24th, 2009

    What a great article! These are some practical, applicable tips we can all keep in mind to help manage our credit card spending. Thanks, Kerry!

  14. Bobby November 25th, 2009

    Hope to Prosper: Hadn’t thought of that one. Great tip.

  15. Jason November 25th, 2009

    Yip, there is nothing like paying off the credit card balance in full each month and being given a dividend on all the purchases made. They pay me :) and I love it.

  16. Carl November 29th, 2009

    A little trick that people can use to stick it to the credit card companies if you can not afford to pay off each month and get yourself to where you can is to apply for credit cards that have an introductory rate for transfers. Use them until the rate is gone and apply for another one offering the same thing and transfere over canceling the first card so your debt ratio does not go up. You save a pile of interest and get out of debt sooner. do not be lured into increasing debt while doing this or you will end up in a real mess.

  17. Joseph Mwangi December 1st, 2009

    I personally prefer to use cash, having paid off over 20K in plastic debt i know better how easy it is to fall in these debt. If i do not have cash available whatever it is can wait.

  18. Tony December 2nd, 2009

    Using cash is somewhat old-fashioned, but it gets rid of many problems associated with credit cards. If you are having constant problems with the payment of credit card debt, the best way would be to use cash always in all cases which this is possible.
    Thank you for the article and keep well.

  19. harrietglynn December 15th, 2009

    Stephen – that is brilliant! I am going to do that. One year I got so angry at all junk mailers, I returned their envelopes with the forms saying “deceased.” But I started to feel like I might jinx myself so halted the practice.

  20. harrietglynn December 15th, 2009

    One more thing. I do have a rewards program with Mosaic Mastercard but it’s free and it pays me a small percentage based on how much I spend. I never get back more than a $100 a year but at least they’re paying me money – actual cash (off my balance) but no airmiles etc…

  21. tiffany January 14th, 2010

    when you’ve got a hold on your cash, using your credit card to pay off monthly bills is a solid! you’re building your credit and keeping your expenses low!

  22. mookie g April 29th, 2010

    these are terrible ways to screw your credit card company… this guy must work for them.. first run up your balances then don’t pay them

  23. John June 10th, 2010

    They screwed me now I screw them. BANKRUPTCY
    Especially BoA about 20k Capital one 13K and much more.
    They raised rates and did not want to lower them even with good credit.
    I don’t care anymore. Screw them……………..

  24. Meglymoo July 4th, 2010

    @Vi Wickam: I love Dave Ramsey…but he says to never use credit cards AT ALL! Debt-free is wonderful. I’m debating on a credit card because I know I can restrain myself to only buy what I have cash to pay back in FULL and to not go out of my means, but there’s always that feeling of unrealistic security like if you lose your job or something and you go “well we can just charge it to the credit card and pay it back when we have money…because we NEED it”…that’s dangerous ground and in that case I’d rather just stick to cash and debit cards and checks. But on the flip side, using a credit card wisely (by only buying what you have that exact money to put away and pay off your monthly balance in FULL every month) can get you a quick, upped credit score to buy a house or get a car or get a loan if needed, etc. What to do???

  25. salamanderspirit January 15th, 2011

    I have a question about credit card debt. There’s an email circulating around right now about what happens after a person dies. Apparently the credit cards (unless cancelled) continue to accumulate fees, etc – something that can really be awful when the family members eventually discover that they have to pay off this debt.

    In Canada, what exactly happens to a credit card (and the remaining balance) when the holder dies?

  26. Kerry January 16th, 2011

    @Salamanderspirit Great question! In Canada, you are not responsible for any credit card debt you have not contractually signed-up for. So if you’re a joint holder on the deceased credit card account — that debt is your responsibility! If you are not a joint holder on the deceased credit card account — the debt is theirs. If the deceased’s estate can not cover the credit card debt, the issuers will probably have to write this debt off.

  27. Jeff March 4th, 2011

    Good article, and I aggree with Dave Ramesey,Larry Burkett and David Chilton, but when your part of Canada’s under employed what can you do?? If I live on cash then I would have to live in a bus shelter and eat 1 meal a day. Having high debt load, when I call in to try and get a lower rate they say call back when your credit score is higher and your debt load is lower. Trying to get a consolidation loan the bank says the same thing?

  28. everydayathena March 4th, 2011

    I hear you, Jeff. I was just pondering this the other day. I think the articles on this website are so useful, but they’re useful for people who have money. Sometimes I just shake my head at some of the commentators who pride themselves on how they “always tuck away money for savings, always contribute to a TFSA”, etc.

    I am still looking for a financial advisor – either online or in person – who can help people with serious debt and serious credit problems – people that creditors treat with, at best, unprofessional disdain and, at worst, callous mercilessness. It’s very easy to get what you want from creditors when your credit rating is high and when you’ve always got a hefty minimum balance in your account.

    I am presently seeing a credit counsellor; we set up a budget 1.5 years ago and I have not ONCE been able to stick to it. How can you “tuck away” even $20 for savings when you’re two months behind on car payments, car insurance, etc etc? Do financial advisors truly understand how helpless – and hopeless – struggling Canadians truly are?

  29. jeff March 6th, 2011

    Athena …

    One thing I did try 2 years ago was asking my credit union for a r-s-p loan. I told them I would need an extended payment schedule. They set it up over 1 year. When I would miss a payment on it, they did’nt freak out about it, and I would go in and tell them when I could make the next one. I managed to pay it off in just over a year.

    One good result that i did not realize until later was, I have a student loan in default with a collection agency, and so all my income tax and g-s-t credits are redirected to the collection agency. So when the tax rebate from the r-s-p came through on my income tax, it made a substancle payment to the collection agency. So I have done this again this year.

    Another thing I am trying is the “Simply Save” program with TD Canadatrust, where they transfer $1.50 evertime I use my debit card from my checking into a t-f-s-a. I have found that when I pay for anything now, I am choosing to use debit more often, and am starting to actual save this way. I still have alot of debts in collection, but at least this is somthing.

  30. Eddy Peters June 28th, 2012

    Some other ways to screw your CC company:

    1) Request a replacement card for a lost or damaged card. AMEX will send you free of charge a replacement by UPS 1-2 day service. My card is going to get “damaged” or “lost” more often…lol!

    2) Switch from e-statements to paper statements. Support the USPS and cost the CC company money; everybody wins!

    Suck it, AMEX!

  31. Sherry February 10th, 2013

    Kerry, could you publish or list the article “If you need convincing, here’s a 5 Minute Guide to Your Credit Report and Credit Score to get you thinking seriously about paying off your balances.” somewhere else. I can’t access it with my current “outdated” 2009 MacBook! Four years old and outdated! Steaming in Mississauga.

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