When you think of credit cards, most people think only about credit limits and payments and maintaining good credit scores. They see the possibility of more purchase power and many fall into the trap of thinking of their credit cards can be used as “free money”.
However, there are plenty of ways to get the most our of your credit card and actually make credit cards work for you. Here is a list of 10 ways to use your credit card to your advantage.
1. Pay Close Attention to the Fine Print
The Terms and Conditions included with your credit card should not be dismissed. You should take the time to read and understand each word. Typically the credit card conditions may appear to be really long and boring but this information is the heart of your credit card agreement. Reading through each word will keep you aware of exactly what to expect with your credit card agreement and make it less likely you are subjected to surprise or hidden fees or other unexpected rules.
2. Choose A Card That Pays You to Not Spend
As unbelievable as this sounds there are credit cards that will offer incentives for not using your card.
3. Take the Cash Back Route
If you are interested in a reward card, choose one that offers cold, hard cash back into your pocket or in which the total rewards cash amount is subtracted from your total balance each month. There are many cards that offer 1-3% cash back on all purchases using the card.
4. Pay Off the Balance
It is not financially advisable to purchase merchandise on your credit card that you plan to finance long term. You would be better off approaching your bank for a small loan that will likely give you better rates and longer terms without affecting your credit score or raising your interest rate.
5. Always Pay More than the Minimum
If you continue to only make the minimum payment on your credit card balances, expect to hang on to those balances for a long time and be prepared to pay up to 3x’s as much money for what you original spent in purchases. Even if you can’t afford to double the payment each month or pay the balance in full, you should at least attempt to add on $20 each month to eat away at the balance. Essentially, you should not be spending on credit more than you have cash in hand to cover the payment.
6. Sign Your Card
Many people think they are being smart by not signing their card or by writing “See ID” on the back. This theory of thinking is a result of people thinking they can prevent credit theft or fraud by forcing merchants to check id’s. However, most of us realize it is almost a rarity for your id to be checked when using your card and if lost, the scam artist can easily sign their own name thereby giving themselves a perfect signature match to a card that isn’t theirs. But even beyond the fraud aspects, technically you are supposed to sign the back of the card as a way of accepting the terms and conditions of the card. In other words, you are supposed to sign the card in order to even use it.
7. Use Your Statements Wisely
Just like your monthly bank statement, credit card statements can be a great way to track what you are spending, especially when you are working hard on a budget. Instead of generalizing your spending as simply credit card expenses, you will be able to break down your spending and be able to create a better budget. Statements make it easy to remember what you have spent and when you have spent it.
8. Purchase Protection Saves You From Warranties
With many credit card accounts, you get purchase protection that helps you out if something you bought using the card becomes stolen or damaged, You don’t have to shell out the cash for the repairs or replacement and you don’t have to pay extra for the product’s extended warranty offers.
9. Price Protection Keeps Your Cash
How many times have you went out and bought something only to find that a few days later the price has gone down a hundred bucks or more. If your credit card offers a price protection program, you might be in luck as many cards will refund the difference to you if you find a better deal within a 90 day period.
10. Don’t Rush to Close Your Card Accounts
As many will rejoice making their final credit card payment after a long, arduous journey to get out of debt, many think that closing the account is just the thing to do to resist temptation. However, in doing so, you end up raising your ratio of available credit to used credit and that can negatively affect your credit score.
Related Posts:
- Few Of The Most Popular Ways To Get Cash Back And Rewards - In many cases, you can get great rewards for using your credit cards if you manage things correctly. Here are just a...
- Top Three Ways To Build Better Credit - It is in the newspapers. It is on the television. Nearly everywhere you turn these days, the topic of personal finance is...
- 8 Ways to Use Your Rewards to Save Money on Your Vacation - There are definitely pros and cons to using rewards credit cards. In order to maximize the benefits of rewards cards and to...
- Ways to Protect Yourself from Credit Card Charge Fraud - Whether the fraud is perpetuated on the part of some thieving criminal who steals your identity and has a hey-day with your...