How to Make Credit Card Companies Fight for Your Business

Want to know the secret to getting the best credit cards? Follow these steps.Image source: Getty Images.

Credit card issuers want to make you feel like your fate is in their hands when you apply for a new credit card, but you have more power than you realize. By understanding how credit card companies make money and what factors they look at when evaluating applications, you can take steps to have them fighting for a place in your wallet. Here's what you need to do.

1. Keep your credit score high

The single biggest factor that can qualify you for the best credit cards is your credit score. This is a measure of your financial responsibility, and it's crucial to credit card issuers because if you were to declare bankruptcy, they'd lose all the money they'd lent you. A high credit score tells credit card companies that this outcome is unlikely because you've demonstrated responsible money management in the past.

There are several credit scoring models, and you won't know which the credit card issuer is using. But all of them tend to look at the same factors, including:

  • Payment history
  • Credit utilization ratio (the percent of available credit you use)
  • Length of credit history
  • Credit mix (credit cards, mortgage, auto loan, etc.)
  • Number of credit card inquiries

If you want credit card companies to offer you their most exclusive cards, you need to excel in all of these areas. Always pay your bills on time, don't apply for new credit too often because too many inquiries on your reports raises a red flag, and think twice before closing down unused credit accounts because they could reduce your average account age. You should also aim to keep your credit utilization ratio under 30%, and the lower the better.

Most credit scoring models use a scoring system that ranges from 300 to 850, with a higher number being better. While lenders may differ in what they consider an acceptable score, most consider a good score to be about 700 to 750 and an excellent score to be 750 or above. If you have an excellent score, credit card companies will be more interested in working with you because there's very little chance they won't get their money back.

2. Boost your income

Credit card issuers usually ask you to report your income when considering your application because they want to make sure you have enough money coming in to cover your payments each month. They also use this information to set your credit limit. It's illegal to lie on your application and say you make more money than you do, but if you can legitimately increase your income by pursuing a promotion or starting a side hustle, this will open new doors for you.

When determining your income for the sake of a credit card application, include money you make from a full- or part-time job, investment or retirement income, and alimony or child support payments. If you're married, you can also count your spouse's income.

But it's not income alone that matters. If you have monthly debt payments that are almost equal to your monthly income, credit card companies are going to be leery because there's an increased chance that you could default. But if you keep your debt-to-income ratio as low as possible -- and preferably under 30% -- a high income can help get you access to premium credit cards with rare perks and high credit limits.

3. Charge a lot to your credit cards -- but not too much

Credit card issuers make money every time you swipe your credit card, so the more you use the card, the happier they will be. While most credit cards don't impose limits on how much you must charge to your card, some of the most exclusive, invitation-only credit cards are only available to cardholders who spend a certain amount.

Be careful not to spend more than you can afford to pay back at the end of the month, though, or you'll carry a balance. This will accrue interest daily and once you fall into that cycle of debt, it can be difficult to get out.

4. Negotiate

If you want companies to actually fight for a place in your wallet, it doesn't hurt to make them think you're willing to walk away. If they think there's a chance they'll lose you to a competitor, most companies will negotiate fees, interest rates, credit limits, and even reward terms.

Call the company and tell them what you want. Highlight your loyalty if you've been with the company for several years, and don't be afraid to bring up deals that other card issuers have offered you as leverage. You may be surprised by what you can get.

Sit back and reap the rewards

If you do the four things listed above, you stand a good chance of being approved for just about every credit card you apply for. You'll get access to the most exclusive rewards credit cards, including high cash-back-rewards-earning rates, airline credits, travel concierge services, exclusive gifts, and more.

But with premium cards come premium fees, so think carefully before signing up for one of these. If you don't think you'll spend enough to justify the annual fee, you're better off going with a no-annual fee credit card.