5 reasons your card issuer is mailing you
When you see a letter from your credit card issuer, it's tempting to toss it straight in the recycling bin along with your junk mail, assuming it's a "special offer" that doesn't interest you. Often, though, it's something important you'll want to read.
Here are five important reasons your credit card issuer is mailing you.
1. Your new (or replacement) card.
You might not have to mail in a credit card application, but you'll still receive some of your card documents in the mail. If your credit card application is approved, one of those letters includes your new credit card.
"You'll also want to take time to review the cardholder agreement to make sure you understand how the rewards and fees work," Judith Cane, money coach, said in an emailed response to questions. "The agreement can vary between credit cards."
You may also receive a letter containing a card if your current card is about to expire, so check your mailbox when the expiration date is nearing.
2. Credit card statements.
Your credit card statement tells you what your balance is, when your bill is due and how much the minimum payment is. It also lists your purchases for each billing cycle.
You may opt to receive your statements electronically, but keep in mind that sometimes, it can be helpful to receive paper statements.
For instance, when statements are online, they're usually only available for a limited time, and then you must call the bank to request older statements. Furthermore, when you receive your statements by email, they could go into junk mail, and you may overlook them.
"The last thing you want to do is miss paying your credit card statement on time because you overlook it in your inbox," said Cane.
Receiving a paper statement may also be a physical reminder to look at your statement, which is important in spotting fraudulent or erroneous charges.
Of course, if you have a direct debit set up, or if you are diligent about checking your statement online more than once a month, you can eliminate at least one piece of mail in your physical mailbox by receiving electronic statements.
3. Credit limit increase notices.
From time to time, if you're a responsible credit user, your credit card issuer may decide to raise your credit limit. Your issuer must notify you of this increase, and often, the notice arrives in the mail (if you have opted to go paperless, this notice may arrive in your email inbox).
If you want the extra credit, you'll have to act within a certain time period or else the credit limit increase won't take effect. The notice will have all the details on how to get your credit increase, so don't throw it away.
It's important to consider how a credit limit increase could affect your credit score before you accept or reject the offer. One of the factors lenders look at when considering whether to extend you credit is credit utilization, or how much credit you use compared to how much is available to you.
"A good rule of thumb is to keep your utilization below 35 per cent," David Blumberg, public relations director at TransUnion, said in an emailed response to questions.
If you're constantly spending up to your credit limit each month (even if you're paying off your balance in full and on time), it could be adversely impacting your credit score. By increasing your credit limit and giving yourself some breathing room, it could help your credit score in the long run.
However, if you are only making minimum payments each month and carrying a high balance, adding the temptation to spend more might not be a good idea.
4. Credit card cheques.
Sometimes, especially around the holiday season, card issuers send you credit card cheques in the mail. This lets you write a cheque and have the funds come out of your credit limit instead of your chequing account.
While this may be convenient, especially if you don't have the funds in your account, be aware of the fees and interest associated with credit card cheques, which can be quite high.
"Credit card cheques are a nice gift - for the banks," said Cane. "With the hefty fees, it's best to stay clear of them."
5. Changes to your agreement.
When you sign up for your credit card, you'll get a cardholder agreement. This agreement is not set in stone, but credit card issuers are required to let you know in writing about changes in your card agreement. The changes usually involve rewards, fees and interest calculations.
Again, if you've opted to "go paperless," you may receive these notices in your email.
Now, you may find it tedious to receive paper mail from your card issuer, and often, you can opt to receive most letters online. But your card issuer may still have reason to mail you, such as in the case of new or replacement cards, so if you receive mail from your card issuer, open each letter to make sure it's nothing important.
Once your issuer has informed you of something in writing, the excuse "I didn't know" is no longer valid. The onus is on you to read your mail - or your email.
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