Credit cards are a great way to build up your credit quickly. It doesn’t matter whether you’re a student or you’re setting up your own business.
Despite the many benefits of using credit cards, you can also get yourself into a wide range of financial corners. That’s why it’s really important that you know how to use a credit card to your advantage.
If you already have a credit card, these 10 tips will come in handy. And if you thinking of signing up to a credit card soon, it’s useful to keep the following tips in mind. Keep reading to find out more!
1. How to Use a Credit Card 101: Shop Around
One of the most difficult problems with finding the best way to use a credit card is knowing which credit card to get.
Before you can enjoy the benefits of credit cards, it’s essential that you understand what you’re getting yourself into. This means you need to shop around before you decide on the right one for you.
After all, every credit card provides users with different features. These include everything from the rewards system to the insurance features.
Most importantly, this involves making sure you select a credit card that includes the rewards and benefits that suit your lifestyle. For instance, if the credit card offers you discounted air miles, this is useless if you don’t fly.
Perhaps you prefer to benefit from the generous shopping discounts provided by a specific credit card.
2. Spend Money to Make Money
If you want to enjoy the advantages of credit cards, it’s important to understand that you have to spend money to make money. It’s no good tucked away in your wallet, get it out and start swiping to receive the rewards.
Whether it’s paying your monthly utility bills or purchasing clothes in your favorite store, using your credit card can get your rewards in the form of points. You should know where to shop to earn the most points with your credit card.
You can later make use of these points in the credit card company’s reward catalog. Even though sometimes rewards are only small gifts for loyal customers, they can amount to massive prizes, such as luxury vacations, fancy restaurants, or brand-new cars.
3. Effectively Use the Float
It’s also beneficial to make credit card purchases at the start of each billing cycle. This allows you to take advantage of the maximum amount of interest-free time.
This often includes up to 55 days of interest-free credit. This breaks down as 30 days for the float and the standard maximum 25 days.
This allows you to be able to pay a medical bill with your credit card, before being reimbursed by the insurance company. When the insurance money comes in, you can use that to pay off your credit card bill in full. This means that at no point do you have to spend any of your own money.
4. Pay the Full Amount Always
While it’s often possible to pay a minimum amount of your outstanding balance, it’s certainly not advised if you’re serious about taking advantage of credit cards. Instead, you need to pay the full amount of your credit card bill always. If you don’t do this, you’ll be charged interest on your credit card.
If you simply cannot afford to pay off the full amount at the end of the billing cycle, it’s important to pay off as much as you can. This will help reduce the impact on your credit rating and the rate of interest you pay.
5. Always Pay on Time
If you pay late, credit card companies can charge you a huge amount in fees. You have to make sure you always pay on time and never forget.
After all, your credit score is mostly related to how soon you pay your bills. By paying late, you risk serious damage to your credit score. This can have significant effects on your financial future.
6. Monitor Your Credit score
It’s important to monitor your credit score. If you want to have a bit of an understanding of what makes a good credit score, a good rule of thumb is that anything over 750 is generally considered good.
There are many things that can influence your credit score, it’s important you’re alert to what these are.
7. Opt for Chip and PIN cards
The problem of credit card fraud is increasing due to the rise of cybercrime. That’s why it’s especially important to make sure your credit card is secure.
It’s much safer to get a chip and PIN card and much more difficult for fraudsters to steal from you.
8. Make Use of Benefits and Offers
There are always plenty of benefits and offers that are promoted by the credit card company. By keeping track of these, you can enjoy the benefits of credit cards.
9. Enjoy a Variety of Benefits
If you’re a couple, you can enjoy twice the number of benefits by making sure you both use different credit cards. By spreading the benefits of different credit cards across both of you, you can enjoy a variety of rewards.
10. Don’t Get Too Many Credit Cards
When realizing the advantages of credit cards many people choose to start owning as many credit cards as possible. However, this is not recommended.
After all, the more cards you have the more likely to find yourself in trouble. It not only increases the risk of loss and theft but also your temptation to spend.
Most people shouldn’t need more than two credit cards at one time. This leaves you with one for regular use and another in case of emergency.
How We Can Help
We can help make learning how to use a credit card easy. To do this, we offer a wide range of credit card advice and personal loan options for consumers, particularly those interested in repairing their credit histories.
Contact us to find out more about how we can help you to solve your financial issues and take control of your financial future.