How To Make Credit Cards Work For You – Instead The Other Way Around
Swipe, swipe, swipe.
This simple action is experienced by all card holders as this action open the doors of luxuries, ease, and lifestyle privileges for their doers. Likewise, using this action irresponsibly can lead to a world of debt but, by adopting a few simple tips you can take many advantages out of your credit card rather than to make it your liability.
- Pay Your Bill On Time
The number one rule for a happy, healthy credit score is to pay your bills on time. In addition to dinging your credit score, late payments can result in penalty interest rates and ugly late fees and since 35% of your credit score is based on your payment history, a missed payment can adversely affect your score. To avoid this, set up automatic payments notifications to pay your bills.
- Pay Full Payment Every Month
If you don’t want to end up used by your credit card, you need to avoid getting into credit card debt altogether. That means paying your bill in full each month. If you don’t pay your balance in full each month, your creditor will add interest to the total amount you owe. When you pay full payment and avoid interest charges, the credit card company is basically paying you to use their card.
- Take Advantage Of All The Rewards You Can
Credit card rewards offer an average of 1% to 2% back on your purchases. The points/miles/cash back you earn is redeemable for cash, gift cards, travel etc. If you spend a lot of time in your car, find a card that awards double points to gas station purchases. So, do find the rewards program that fits your lifestyle and enjoy your credit card.
- Pay Your Balance With Points
If you have card with cash rewards or your points can be used towards a variety of nice merchandise, say no to use those rewards. Most rewards card enables you to put your rewards points towards your balance. This increases the value of the rewards points because not only they are paying off the debt but they are also decreasing your interest burden.
- Choose Card With Extra Perks
Many credit cards come with a swing of useful benefits, including price protection, extended warranty protection, rental car insurance, trip cancellation coverage, etc. To ensure that you are using your credit card with its full advantages, look into your benefits statement to be aware of which benefits may be come in handy, these perks can save you hundreds or thousands of rupees, over the life of your card.
- Keep Track Of Your Purchases Through Login
Credit card is easier than cash to use because it creates a paper trail so it is easy to track your spending. When you do purchasing through credit card, you don’t have to keep receipts for things like grocery. Instead, you can just log in to your online account to see where you spent money, how much you spent, and how much you have left.
Checking in regularly can help you stay on top of your budget so it never spirals beyond your control and make you fall under debt.
- Only Use Credit Card For The Big Stuff
Many people under credit card debt complain that it sneaks up on them. Sometimes it’s those small amount purchases that, goes on and on, when left unsupervised can take on a life of their own. Do you want to dodge a “death by a thousand cuts,”? Then consider using your card just for big purchases only. The correct way to do this is to save up for your purchase in cash first. Then, after making the big purchase with your credit card (and reap the rewards points), you’ll have the amount to pay it off right away.
- Choose Wisely
Do you know that all credit cards are not same? When you are selecting a credit card, compare different cards based on your needs and the card terms. Look for the following:
- APR: which is the amount of interest you will pay if you do not pay your balance in full each month.
- Fees – annual fees, late payments, balance transfer fees, over the limit fees, etc.
- Credit limits: Your credit limit should be according to your budget and not so high that you are tempted to spend more money than you can genuinely afford.
Your credit card can be a cool companion of yours if you maximize its effectiveness with the help of the above mentioned useful tips and make it work for you. So choose and use your credit cards wisely!!!!!