A credit card can be good or bad for your financial well-being. If you don’t understand the advantages it can give you, it’s probably going to be a bad choice. It’s easy to buy more than you should, or to buy something before you can really afford it. A credit card can let you get away with this, but you’ll have to pay all of the money back at some time, plus the interest. This is how credit card companies make their cash – through interest and charges.
If the cards were only good for the company though, there would be less of them out there. Thanks to rewards like cash back and frequent flyer miles, credit cards can actually be used to YOUR benefit. Here are 5 tips to help you make the most of your card!
1. Shop Around
A lot of people start considering a credit card when they come across an ad, or when they receive a letter or e-mail saying they’ve ‘pre-qualified’ and should fill in an application. This happens because there’s an attractive offer which catches the eye, so it’s natural to just take it at face value and sign up.
The problem is that you haven’t even looked at the alternatives. If you really want to make the most of your card, shop around and find the best deal for you. There are plenty of sites which are good explaining credit card programs. You can get different rewards depending on how and where you use your card, so this will play a big part in which card you choose. They also all have different interest rates, limits, and fees. Find the best overall deal for you. Sometimes it’s even better to have 2 or 3 cards for different uses, just make sure you’re on top of the payments!
2. Use Balance Switches
Switching a balance from one card to the other sometimes has charges. For new sign-ups, you can sometimes get free balance transfers. If this is combined with an interest free introductory period, you can avoid paying any interest by moving debt on to this card. It is possible to move balances around a few times if you have multiple cards too, so the savings can be BIG!
3. Take Advantage of Cashback
If your card offers cashback rewards, always use it to take advantage of them. You can pay the balance off before any charges are added for almost all cards, so you won’t pay any extra than you would have with cash. In fact, because you earned cashback, this way works out cheaper.
4. Always Pay the Balance on Time
Make your payments on time to protect your credit score and your wallet. It’s best to always pay the entire balance before any interest charges start to take effect. If that isn’t possible, keep the balance as low as possible instead.
5. Claim Every Reward
Credit cards offer all kinds of rewards, and not all of them are automatically awarded. Sometimes you need to contact the company directly and ask for the reward, so make sure you’re getting everything you’re entitled to.
*Disclosure: This post was submitted on behalf of PennyMindingMom.com