How to Play the Credit Card Game for Fun . . . and Profit

Robert McKinley, head of a credit industry research and publishing firm, is arguably the foremost credit card expert in the nation.

Open his wallet and here’s what you’ll find: an American Express card and a debit card from his bank.

Why, in this era of super-rebates, credit checks, low promotional rates and fewer annual fees, wouldn’t McKinley, president of Frederick, Md.-based Ram Research, have a pocketful of plastic?

Too much trouble and too many rules and requirements that he doesn’t want to deal with.

McKinley says that the credit card market keeps changing the small print. After a few years of fierce promotions, card issuers are reviewing their business and finding cause for concern: Some of those questionable customers they sent cards are not paying their bills.

Even worse, some customers are always paying their bills, and the banks that sent them cards aren’t making nearly enough money on them. So the issuers are tightening up their rules on who gets cards and their loopholes on who wins with them.

All of which means you shouldn’t feel bad if you lack the mental energy required to win at the credit card game. You can just get a no-fee card, pay your bills in full every month and throw out all the offers. If, on the other hand, you’re willing to spend time and effort playing the credit card game, there are still a few ways left to profit off the banks and businesses that issue the cards.

Here are some of McKinley’s suggestions.

* Hop around. You can still switch cards every six months to capture promotional rates and deals without getting turned down, but this can be very tricky. Unless you cancel every card you are finished with, you can end up with a credit report that shows you have lots of outstanding cards. That in itself could hurt your chances of qualifying for the next card, or even a mortgage or car loan.

* Shift. Here’s another scheme that can get you mileage or more if you’re willing to do the work. Charge everything on a rebate card that gives you mileage, rewards or cash back. When the bill is due, transfer the balance to a low-interest rate card by paying off the first bill with a check from the second.

Or, play the rebates: transfer balances from one rebate card to another. Along the way you can use multiple grace periods and amass mileage and store credits on the same money.

This tip comes with caveats: Many card issuers treat balance transfers as cash advances that have extra charges and no grace periods. Clearly, this strategy won’t work with those cards. Other rebate cards limit balance transfers.

* Get loud. Credit card rates and fees are incredibly negotiable, McKinley says. If you run balances at or above the national average of just under $2,000, your card issuer is making plenty on you. And it will cost your issuer between $40 and $120 to find another customer to replace you if you leave. So ask away: Annual fee waivers and reduced interest rates are easier to get than you think just by asking.

* Watch for new deals. American Express is looking to issue cards in combination with Visa, Mastercard and the banks. These deals are bound to include some good benefits to bring in new customers. Grocery firms have already jumped in with cards that can get you significant discounts on your weekly food bill and McKinley says the utilities aren’t far behind.

* Avoid running balances on retail cards. This tip comes not from McKinley, but from Consumer Action, an advocacy group that has discovered that those specialty credit cards tend to come with very high interest rates.