Tips For Using Credit Cards To Your Advantage

Credit cards, when used wisely can offer great benefits and advantages over using cash. While many Americans do use and abuse credit cards and find themselves buried in debt, an equally number of people use their credit cards to their advantage. Here are some tips that you can follow to help make one of your 0 credit cards work for you.

Understand Your Card’s Award Program

In order to get the most out of your credit card, you need to know the ins and outs of your card’s reward program. Hopefully you have chosen a card that has no annual fee and offers a straight percentage in rewards regardless of what you spend. Additionally, you will want to know if there are any limits in the rewards you can earn and if there are any terms or conditions when it comes to reward redemption.

As long as you are paying your balance in full and on time every month, a rewards credit card can really add up. Keep an eye out for any special offers your card may put out for bonus points and make sure you cash in.

Avoid Credit Card Fees

Savvy credit card users who get the most out of their cards always make sure that they avoid costly fees. This means that they always pay their bills on time to avoid any late penalty fees and even more importantly they pay their bill in full each month, so that they can avoid accumulating interest. Additionally, smart credit card users stay away from credit cards that charge high annual fees.

Save on Existing Credit Card Debt

If you do find yourself with credit card debt you can’t afford to pay off all at once, a 0% balance transfer card is another great tool that savvy users take advantage of. Just be careful when you open one of these cards that you have read all the terms and make a plan to pay off your balance as soon as you can. Look for balance transfer offers that are good for at least 6 months, and have a low balance transfer fee.  If you do not pay off your transferred balance in full by the time the promotional period ends, you could be looking at hefty interest charges – so make sure you understand what the interest rate will be on any remaining balance once the 0% balance transfer period ends.

Improving Your Credit Score

You should also be aware of how important responsible credit card use is to your credit score. If you are looking to improve your credit score, one of the best things you can do is to use a credit card for small purchases each month, then pay your bill on time and in full every time it comes due.  The credit card company will report your on-time payments to the credit bureaus, and over time, this will start to increase your credit score. Just be sure not to charge too much so that your debt to credit available ratio stays low.