ways to use credit cards to your advantage

Ways to Use Credit Cards to Your Advantage

What if you began treating your credit card as a helpful financial tool rather than a liability? What if you made it your steady friend rather and stop fearing it for its debt-inducing potential? These and more benefits are outlined in the article to come.

According to the 2013 Federal Reserve credit card debt statistics, Americans consumers owe $849.8 billion in debt.
It is possible to sustain without a credit card, and some have been doing so for decades. That being said, more and more people are going card-free with the aim of avoiding debt. However, there is still a huge chunk of the populous that needs this piece of plastic and cannot imagine a life without one, two, or more credit cards. Those who have mastered the skill of using this potent weapon, find it easier to manage their money and lifestyle because of this financial tool. This Buzzle article discusses ways in which credit cards can be used to your advantage.
Pay Your Dues on Time
This is the cardinal rule of using credit cards, and unfortunately the toughest one to abide by. Being a credit card user, you are duty bound to pay off your balances in full so that you can avoid bearing the brunt of paying interests and fines for default payments. Albeit temporarily, paying the minimum balance is one way of easing your financial pressure. Another way to pay off your dues on time is to apply for automatic debit facility, wherein the credit card issuers will deduct monthly payments from your account without you having to make the payment through check. This method also negates the fear of forgetting to make payments. However, you must have sufficient balance in your account and a stable income in order to honor this type of transaction.
Choose Cards With Low Annual Fee and Good Rewards
There are several credit cards that do not charge much annual fee, or don't charge anything at all, while providing equally good reward benefits. While considering which card to avail, consider the rewards and features offered by them. Unless a high-fee card offers you really unique and much-needed privileges, apply for a more cost-effective alternative that meets your needs without you having to shell out on an annual fee. While considering a new card, ensure that the rewards offered make the fee worth its price, or else, search for better options.
Capitalize on Rewards
Almost every credit card out there offers its own share of points, air miles travel rewards, purchase protection, extended manufacturer's warranties, and cash back. Reward credit cards offer points for every purchase, which can be piled and used for making purchases without spending any further cash. As long as you pay off your balances in full on a monthly basis, you will be able to deflect interest and late fees, thus, being able to avail the obvious as well as hidden benefits of your reward points. Go in for a credit card that offers more rewards for usual monthly expenses, such as fuel, groceries, utilities, electricity and phone bills etc. Thus, the more reward points you collect, the more 'money' you'll be making, which can be used for meeting these everyday expenses. You would also be able to save more because your spending would have reduced substantially as well.
Go in for Low Interest Credit Cards
You could consider going in for a low interest credit card in case you tend to carry balance for months. You could also go in for a card that offers very little interest or even an introductory 0% APR. Such cards will allow you to transfer your balance from your old credit card and pay off the balance at a much lowered interest. That being said, it is becoming increasingly difficult to find cards that offer 0% APR along with balance transfer.
Utilize the Insurance Offered
Annual fees are related to the quality of insurance offered by the credit card. Thus, the more insurance coverage offered by the card, the more expensive the annual fee is likely to be. Therefore, go in for a credit card that offers you the type of insurance you require, while matching your spending habits. That being said, albeit less, cards with no annual fee also offer insurance. Make the best of your credit card insurances that cover flight cancellations, car rental damage, medical insurance while traveling, lost or stolen baggage, and much more.
Charge Big Expenses on Your Credit Card
The bigger the expenses you make with your credit card, the greater the rewards you get. You can designate one of your cards for making hefty payments, as long as you do not exceed your credit limit. Consult your card issuer to find out your credit limit and if there is any permissible margin by which you can exceed this limit, without harming your credit score. The basic rule of using a credit card and making it your friend in need rather than a formidable foe is to spend within your means and only for the things you need. The moment you begin spending on the things you want but do not require, you'll be stepping into the splurging zone.

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