How to get Maximum Value out of your Credit Card
How to Get Maximum Value out of your Credit Card
In this digital era, there is power in wielding a credit card. The convenience they offer goes far beyond saving money and into making money when you spend. However, when used irresponsibly they can become a source of misery and leave you with loads of debt that is difficult to climb out of. Therefore, the most important thing is to learn how to use plastic money judiciously by learning how to leverage and reap the most benefits.
Assess before you settle for a card
Look at several options and be keen on their features such as rewards and fees. Then, make an assessment to your lifestyle and know where most expenses are likely to occur. If you spend a lot of time driving around, get a card that gives maximum rewards on gas. While studying the various options, be on the lookout for extended warranties, credit shield, lost card liabilities and purchase protection among others. In short, because there are many options with different rewards and benefits, it’s important to take some time and decide which one will be most suitable to you.
Take advantage of the 0% interest rate
Most credit cards offer a 0% interest rate on spending for a whole year. With these offers, it’s possible to make a purchase that has been postponed for some time. If you plan well, 12 months could be enough to pay back a well-thought expense.
It’s also possible to get a 0% interest on balance transfers for 24 months. This is a wise option for people who want to pay off their debt. Instead of holding on to a card with a 20% interest it’s better to transfer the balance to another card with 0% interest and take the next two years to pay the debt interest-free.
Study and understand the fees and keep a safe distance
Banks are near perfect in making money out of plastic money. Apart from the annual fee, there are several charges that you need to understand and avoid them. Do a background check and find out how much your service provider charges for the following:
As a customer, you have the right to raise or lower the limits but you have to ask for it. If you have a high limit, some peace of mind is guaranteed knowing that there’s some funds for you to spend should a tragedy strike. However, that should not be a green light to overspending. Discipline your spending habits and leave at least 20% of the limit unspent to stay away from hefty over the limit fees.
Sometimes, people lower the credit limits to tame their tendency to overspend. While this can be a good way to safeguard your finances, it also inhibits you from making big purchases that could mean more rewards.
Pay the full amount on time
One of the easiest ways of making credit cards expensive is paying the minimum amount and rolling over the balance. Normally, this attracts a huge annual fee that may range between 24%-40%. Once this happens all additional purchases made will be exempted from a grace period and the interest will be billed from the day you made the purchase.
For you to get a more value, it’s imperative that you form the habit of paying the total balance at the end of a billing cycle. If the amount is huge, try spreading it across the month so that at the end it will be fully settled. If that is not feasible, pay the maximum amount you can afford above the minimum amount. Doing this will lower the interest rate.
A key factor that contributes to the credit score is payment history. Delayed payments will contribute poorly to a poor score. For multiple card holders, it would be easier to work with a synchronized due date to make sure no payment will be missed.
Cancel any credit card that you don’t need
Having several cards will raise the tendency to spend beyond your means. Considering the fact that this source of financing is the most expensive, integrity with money cannot be emphasized enough. If you feel that there is need to have multiple cards, don’t let it be more than two. Set one card for daily expenses and the other one for occasional unforeseen expenditure.
On the other hand, it’s possible to acquire complimentary cards with members of your family. If one person has one that offers maximum benefits on air tickets the other one can hold a card that focuses on shopping and so on.
Conclusion
Debts will significantly jeopardize your ability to save money for the future and hold you at ransom. However, credit cards can be used wisely to help you optimize the finances at hand while at the same time reaping sweet benefits.
To be more than just average requires specific action especially within the topics of money. Always strive to look for ways to be smarter with cards and the first step is to understand your needs.
Posted 13 June 2017 (2 years)
How to Get Maximum Value out of your Credit Card
In this digital era, there is power in wielding a credit card. The convenience they offer goes far beyond saving money and into making money when you spend. However, when used irresponsibly they can become a source of misery and leave you with loads of debt that is difficult to climb out of. Therefore, the most important thing is to learn how to use plastic money judiciously by learning how to leverage and reap the most benefits.
Assess before you settle for a card
Look at several options and be keen on their features such as rewards and fees. Then, make an assessment to your lifestyle and know where most expenses are likely to occur. If you spend a lot of time driving around, get a card that gives maximum rewards on gas. While studying the various options, be on the lookout for extended warranties, credit shield, lost card liabilities and purchase protection among others. In short, because there are many options with different rewards and benefits, it’s important to take some time and decide which one will be most suitable to you.
Take advantage of the 0% interest rate
Most credit cards offer a 0% interest rate on spending for a whole year. With these offers, it’s possible to make a purchase that has been postponed for some time. If you plan well, 12 months could be enough to pay back a well-thought expense.
It’s also possible to get a 0% interest on balance transfers for 24 months. This is a wise option for people who want to pay off their debt. Instead of holding on to a card with a 20% interest it’s better to transfer the balance to another card with 0% interest and take the next two years to pay the debt interest-free.
Study and understand the fees and keep a safe distance
Banks are near perfect in making money out of plastic money. Apart from the annual fee, there are several charges that you need to understand and avoid them. Do a background check and find out how much your service provider charges for the following:
- Late payments
- Finance charge
- Cash advances or Realistic Loans
- Over the limit fee
- Returned payment fee
As a customer, you have the right to raise or lower the limits but you have to ask for it. If you have a high limit, some peace of mind is guaranteed knowing that there’s some funds for you to spend should a tragedy strike. However, that should not be a green light to overspending. Discipline your spending habits and leave at least 20% of the limit unspent to stay away from hefty over the limit fees.
Sometimes, people lower the credit limits to tame their tendency to overspend. While this can be a good way to safeguard your finances, it also inhibits you from making big purchases that could mean more rewards.
Pay the full amount on time
One of the easiest ways of making credit cards expensive is paying the minimum amount and rolling over the balance. Normally, this attracts a huge annual fee that may range between 24%-40%. Once this happens all additional purchases made will be exempted from a grace period and the interest will be billed from the day you made the purchase.
For you to get a more value, it’s imperative that you form the habit of paying the total balance at the end of a billing cycle. If the amount is huge, try spreading it across the month so that at the end it will be fully settled. If that is not feasible, pay the maximum amount you can afford above the minimum amount. Doing this will lower the interest rate.
A key factor that contributes to the credit score is payment history. Delayed payments will contribute poorly to a poor score. For multiple card holders, it would be easier to work with a synchronized due date to make sure no payment will be missed.
Cancel any credit card that you don’t need
Having several cards will raise the tendency to spend beyond your means. Considering the fact that this source of financing is the most expensive, integrity with money cannot be emphasized enough. If you feel that there is need to have multiple cards, don’t let it be more than two. Set one card for daily expenses and the other one for occasional unforeseen expenditure.
On the other hand, it’s possible to acquire complimentary cards with members of your family. If one person has one that offers maximum benefits on air tickets the other one can hold a card that focuses on shopping and so on.
Conclusion
Debts will significantly jeopardize your ability to save money for the future and hold you at ransom. However, credit cards can be used wisely to help you optimize the finances at hand while at the same time reaping sweet benefits.
To be more than just average requires specific action especially within the topics of money. Always strive to look for ways to be smarter with cards and the first step is to understand your needs.
Posted 13 June 2017 (2 years)
