Credit cards are often considered risky, but when used prudently, they can improve your finances. Here are some tricks to save while using your credit card:
Research Well Before Applying for A Card
Before you apply for a credit card, compare different offers, and read their terms carefully. One card may work better for you than another.
Make More-Than-The-Minimum and Timely Payments
Although it’s recommended that you clear your credit card balance in full every month, it’s understandable if this isn’t always possible. In such a situation, try to pay off more than the minimum and on time. Doing so can help you save on having to pay extra interest.
Own a Spare Credit Card
Rewards cards are great but they carry high-interest rates. If you want to take advantage of the rewards, use them to purchase items for which you can pay off the complete balance each month.
Aside from having a rewards card, consider applying for a lower-interest-rate credit card, so that you can afford to clear the balance regularly.
Try to Get Your Interest Rate Lowered
If you’re a long-standing customer of your credit card company, consider contacting them about lowering your interest rate. They’re likely to oblige your request, as card companies want to keep their good clients.
Don’t Overdo It with The Number of Cards You Own
Having several rewards cards can prevent you from gaining the most out of a single one. Additionally, having too many cards can encourage you to overspend, damaging your credit.
Don’t Rely on Credit Cards During Emergencies
Depending on your credit cards to cover an emergency instead of building an emergency fund is a bad idea. Why? Because when you have no savings and use your card, you end up building a balance that you can’t pay off, which leads to extra interest.
Cash Advances Are Not the Way to Go
Using your credit card for any form of cash advance is a big no-no because it’ll cost you a bomb. Also, don’t use any free checks that draw funds from your account.
Use Rewards Card only If You Can Clear the Balance in Full
As mentioned earlier, card issuers charge high-interest rates on rewards cards to compensate for the rewards they offer. Get a rewards card only if you’re sure you can pay off the entire balance every month.