6 Assumptions You Can't Make About Credit Cards

Think you know about credit cards? Think again. Credit cards woo you and make you feel special, but certain things about credit cards you can’t take for granted. For example, you can't assume that...

You’ll get approved just because you got a pre-approved offer. The credit card offers you receive in the mail are more like invitations to apply. The credit card issuer likely obtained your information from a prescreened list, but they haven’t actually approved you for the credit card. Once you apply, the issuer will check your credit history and income and then decide whether to approve you. You could, in fact, be denied if you don’t meet the qualifications.

You’ll get approved for the lowest interest rate. Credit card offers disclose a range of possible APRs. The interest rate you’re approved for could fall anywhere in that range depending on your credit score. If you have a better credit score, odds are you’ll be approved for the lowest interest rate. However, if your credit score isn’t the best, you may be approved for the highest interest rate.

The credit card issuer will understand if you skip your credit card payment. Per the terms of your credit card agreement, you are required to make at least the minimum monthly credit card payment by the due date. If you miss the due date, you face late payment penalties, like a fee, increased in your APR, or negative entry on your credit report. The credit card issuer won’t automatically waive your penalties because you’ve already paid on time. You may, however, be able to get leniency if you call and ask for it.

Your credit limit will increase just because you ask. Say you want to use your credit card for a purchase that exceeds your credit limit. You should call your credit card issuer to request a bigger credit limit so you avoid over the limit penalties. The card issuer will process your request similar to an application for credit. They’ll check your credit history and income to decide whether to give you a bigger limit. Unfortunately, your request could be turned down.

Being turned down for one credit card means you’ll be turned down for all of them. Don’t be too disappointed if your credit card application is denied. Credit card issuers have varying criteria for approving applicants. Some credit cards are intended for applicants with excellent credit, e.g. credit scores above 720. Others are more willing to grant credit to applicants who don’t have the best credit scores. Try to apply for a credit card that’s intended for your credit score range.

Your interest rate will always stay the same. These days, most credit cards come with variable APRs. These interest rates change based on an underlying index, like the Prime Rate. When the index changes, so does your credit card APR. If you pay attention to the index, you’ll know when if your APR is going to increase. APRs can also increase if you default on your credit card terms, for example, by falling behind on your payments by more than 60 days.

The best way to know your credit card is to read through the terms and conditions. It'll answer nearly all the questions you have about your credit card. And, if you still have unanswered questions, you can do an internet search, ask on a credit card forum, or give a call to your card issuer's customer service.