Credit cards often get a bad rap, but in all reality, they aren’t the evil debt-burrowing monsters that we all assume them to be. Credit cards are tools, and they can be used both wisely and foolishly. You may have already had a friend who had an impulse shopping habit that really flaunted the foolishness of it all, and may have already asked for help with their problem. However, it’s often difficult to peg who knows how to get the most out of their credit until you find out how much they’ve saved through them. Here are ten tips for getting the most out of credit cards.
1. Keep your balance paid off at the end of every month. Paying off your credit card balance in full every month means that you won’t accrue interest. Not accruing interest means that you won’t be in debt, which is what most people detest about the use of credit cards, anyway. Incidentally, doing this practice will also improve your overall credit score. This in turn will make it easier to move up in terms of the kinds of perks that you get from credit cards.
2. Churn. Churning is a common tactic used by super thrifty people with cards that offer rewards. Simply put, they will spend money on their cards, then pay off the balance in full as a way to get free restaurant trips, free air miles, or even free cash back. Churning only works with rewards cards, but the fact is that if you can do it, it works wonders.
3. Take advantage of concierge perks. You’d be surprised at how many companies offer concierge service as a perk for using their cards. If this is the case with one of the cards that you hold, use them. It will save you time, and you might end up being able to book theater trips and restaurants for a discount, too.
4. Move on up if necessary. Some credit cards are little more than a major burden that you had to take on back when you had bad credit. Dealing with a terrible credit card is like dealing with a splinter – you’ll want to get rid of it as soon as possible. If it’s taking a toll on you, you’re better off switching to a better credit card that can offer rewards, or even using a 0% introductory rate to pay off a smaller, high interest balance.
5. Use retail cards to snag a discount at favorite stores. Retail cards are often scoffed at, and often involve high interest rates. However, if you pay off the balance and use the card to buy new clothes, then there’s really no harm in keeping one. If anything, it’s just saving you money in the short and long run.
6. Don’t let rewards points expire – redeem them! You dutifully collected those rewards points over the course of months, or even years. Most rewards points, especially airline points, have an expiration date on them. If you were working towards a specific goal, make sure that you redeem those points before it’s too late…even if you didn’t quite make the goal happen.
7. Use it to boost a relative’s credit score. If you trust your relative, sign them up as a secondary user. If you have good credit, it can help them get better credit too. The one downside is that if they use your card without permission, you will end up having to pay off that balance. Proceed with caution, and only do it for someone you can really trust. Note: Much thanks to ScoreCure for telling us this one!
8. Opt for a card that helps you keep on top of your credit score. Many cards are now offering free credit score checking services for subscribers. Though you can get your credit score checked once a year for free, it usually will cost more than that to see the scores directly from the bureau. Keeping tabs on credit can help you catch ID theft in its tracks, so this is one advantage that you simply cannot ignore.
9. Shop safer and smarter. Thanks to the Fair Credit Billing Act, you are not held liable for fraudulent or erroneous purchases done on credit cards. So, you can nip ID theft in the bud, and also dispute billing errors on items that didn’t quite come out as planned. Even something as simple as being shipped the wrong shirt size on an online purchase can be disputed. Don’t be ashamed to dispute it if it’s not what you were promised!
10. Use your credit card to start a small business. If you’re ready to start a business on a shoestring budget, then you may be able to finance it through a credit card if all other routes have failed. It’s a risk, but many famous entrepreneurs started this way. Why not you?