When purchasing things, you can use credit cards to pay for them conveniently. But it’s also good to avoid extra costs and fees. If you don’t get a careful way of using them you will end up accumulating huge amounts of debt.
Most wise people are those that can be able to use their credit cards in a way that can maximally benefit them in such a manner that they save even when there is a charge on their cards. If you know how to use credit cards they can be a sure way of saving money and you might not want to use cash when making transactions.
It’s very important to ensure that you make maximum use of credit cards in order to get the most of them. Therefore, the following is a number of ways you can use in order to save a lot from it:
Saving money prudently through credit card use
Consolidation of your credit card debt with care
There is a common way that consumers use in order to pay off their debts. This is achieved through the use of balance credit cards that don’t have a transfer fee on them. It’s important to ensure that you look at the cost benefits before you going with such a plan, considering the fact that cards these days have some fees incurred whenever you want to pay your debt.
It’s very important to ensure that you make an assessment of if you can pay your debt before transfer fee on debt kicks in.
Using reward cards only if you can pay your balance in full
So many people love using reward cards. But then the reward cards have high rates of interest than the normal credit cards. Therefore, when it comes to offsetting the rewards you will pay back with a high-interest rate. If you find that you cannot put up with the fact that the reward cards come with high-interest rates, then you will have to apply for cards with low-interest rates.
Being careful when it comes to participation in credit card arbitrage schemes
It’s so hard for many credit card users to make money using their credit cards because of the tough and restrictive environment for card use. Back in the day, it was so easy since card users could take the money they have borrowed and then channel them to high saving accounts that can bring a high yield. However, this kind of strategy is not so attractive since saving accounts do not bring returns as they used to those days.
Those doing it now do it very carefully but any miscalculation can make you pay more than you can get out of it.
Paying more than the minimum and paying on time
It’s good to consider practicing some habits when it comes to paying off debts. This can help you to avoid hefty fees and charges on your account. Pay off your balance fully but if it’s hard to settle it fully you can pay more than the minimum to ensure that you can get more interest in the days to come. Some credit cards will reward their users for doing this.
Do your research before applying for a card
Before thinking on applying for credit cards it’s important to do some little research on various credit cards in order for you to come with information which can help you to make comparisons to help you choose the best credit card that you want to apply for. Before signing up you should make sure that you have read the terms on the credit cards that you want to apply. Ensure that you go for credit cards that are based on the way you spend. Even if you currently have bad credit, there are ways to straighten up the situation, and there are even ways to get new credit cards, for example, Vanquis, just make sure you follow the simple rules to use them correctly and to your benefit.
Don’t own too many cards
Having too many reward cards don’t increase your rewards, they just will make you not to optimize your rewards using one card. And this leads to overcharging and overusing on your credit.
Avoid relying on credit cards to cover an emergency
Emergencies can happen to anyone, but then a number of them think they have funds to cater for the emergency but they end up depending on their credit cards to sort out the emergency. But then if you don’t have any savings, you will have to consider keeping a balance in your credit card since you will be using it for some expenses which are unexpected, which means paying a lot in interest.
So it’s important not to depend on cards to bail you out in case of an unexpected situation since it will only end up costing a lot.
Carrying a spare credit card
If you have an interest in rewards then you might consider owning a rewards card but use it for the kind of items that you can pay fully for every month. However, to avoid this you can acquire another card which is of low interest which is affordable.
Talk to your card issuer about lowering your rate
Some card members have a good reputation which can help them get some leverage. If you have a good history with your card company, you can talk with them to and ask them if they can lower your rates.