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7 Little-Known Facts About Your Credit Card

With a little extra knowledge, you can make your credit card work harder for you.

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There’s probably more to your credit card than you realize. Whether you’re looking for a new credit card or are trying to squeeze more out of what you have, here’s what you need to know to optimize your finances and credit score.

1. Many of the best credit cards offer preapproval

Applying for a new line of credit is a good way to increase your purchasing power and boost your credit score -- but if you apply for too many credit cards at once, your credit score could drop. That’s why it’s a good idea to get preapproved for a credit card before you apply. Many of today’s best credit cards offer preapproval, which gives you the opportunity to find out whether you are likely to be a good match before you take the time to fill out the application. It also helps prevent you from applying for a credit card and getting declined.

2. Your APR could go up -- or down

Credit card interest rates are variable -- which means that credit issuers have the power to adjust your APR up or down in accordance with the prime interest rate. Credit card issuers also have the power to apply a penalty APR if you miss a credit card payment or make charges that exceed your available credit limit. If you want to reduce the amount of interest you pay on your credit cards, you can improve your credit scorenegotiate a lower APR or look for a credit card with an introductory 0% APR period. You can also avoid interest charges by paying off your balance in full, every month, before your credit card grace period expires. 

3. Your credit limit could go up -- or down

Credit card issuers also have the power to raise or lower your credit limit. If you practice responsible credit habits, such as making on-time payments every month and keeping your credit card balances low, you might be rewarded with a higher credit limit. Some credit card issuers also offer higher credit limits to people who report an increase in annual income. If you practice less-than-responsible credit habits, your credit issuer might reduce your available credit. You could also see your credit limit drop if your income decreases or if you stop using your credit card for an extended period of time.

4. Your credit card might offer travel perks

Many credit cards offer perks that can save you money on your next trip or vacation. The best travel credit cards often come with benefits such as complimentary airport lounge access, travel insurance, rental car insurance or statement credits for TSA PreCheck and Global Entry application fees. The best airline credit cards also offer plenty of frequent-flyer perks, including free checked bags and the opportunity to earn elite status more quickly. Even an everyday credit card can come with money-saving travel benefits, such as the opportunity to earn bonus rewards on restaurants, entertainment or gas purchases. 

5. You may be able to upgrade or downgrade your credit card

Many issuers offer no-annual-fee credit cards that complement their other offerings. This gives consumers the opportunity to choose between paying an annual fee and earning higher rewards, or skipping the annual fee and earning a less competitive rewards rate. In many cases, cardholders can contact the issuer to upgrade or downgrade -- upgrading to the annual fee version to maximize your rewards potential, or downgrading to the no-annual-fee version if you aren’t using the card as much as you hoped.

6. Your credit issuer can help in times of need

If you are experiencing unexpected financial stress, contact your credit card issuer. All of the major credit issuers offer hardship programs that are designed to help people during times of financial need. In some cases, you might get your minimum monthly payment reduced. In others, you might receive a lower interest rate. You can also discuss debt consolidation options, but be aware that consolidating your debt could damage your credit score.

7. Keeping your credit card account open is important

There are many factors that affect your credit score, including the age of your open credit accounts. Many people don’t realize that closing a credit account -- especially an old credit account -- could have a negative impact on their credit. It’s also a little-known fact that if you stop using your credit card for a long enough period of time, your credit issuer could begin the process of closing the account. That’s why it’s a good idea to use each of your credit cards on a regular basis. Consider putting a monthly subscription service on your least-used card and using credit card autopay to pay your balance in full every month. That way, you can keep your accounts open and continue to build a positive credit history.

The bottom line

Once you understand how credit cards work, you’ll be able to get more out of each of your cards -- whether you’re maximizing rewards, boosting your credit score or using your credit card travel benefits on your next big adventure. Want to know more? We’ve got a guide to help you get the most out of your credit cards -- and if you’re ready to apply for a new card, we’ve got a guide to help you choose the best credit card for you.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

Nicole Dieker has written about personal finance for nearly a decade. In addition to CNET, her work has appeared on Bankrate, CreditCards.com, Vox, Lifehacker, Popular Science, The Penny Hoarder, The Simple Dollar and NBC News. Dieker also spent five years as a writer and editor for The Billfold, a personal finance blog.