Tips for Using Credit Cards (Instead of Them Using You)

Written by , November 24, 2010

Even if you wanted to get rid of all your credit cards and never use them again, it would be a hard thing to do. It would be next to impossible to travel conveniently without one – just try to rent a car or a hotel room without a credit card, and see what happens if you walk up to an airline ticket counter and try to buy a ticket with cash.

Since you probably want (or need) to keep using your credit cards, make sure you’re doing so in the most effective and efficient ways possible. There are several important tips for how you can use your credit cards in the best possible way. Here is some advice to consider:

  • Avoid late payments. First of all, the most important piece of advice is to never make a late payment. Even if you can’t pay your entire balance, make sure to always pay the minimum amount, and always pay on time. Your credit score will likely be affected. The credit card company could use even a single late payment as a justification for raising your interest rates going forward. This could cost you hundreds (or even thousands) of dollars in the long run.
  • Tuck them away. If you’ve had problems with impulse spending, don’t carry all your credit cards with you. Perhaps just carry a single card for emergencies. Some people who have had particular issues with overspending have had success with carrying a refillable prepaid card with only a small amount of money included on the card at any time. There are fees associated with using and “recharging” these types of cards, but sometimes the savings you’ll achieve by reducing your overall spending more than make up for those fees.
  • Mull it over. If you are considering a large purchase, put yourself through a “waiting period” before you actually buy. Some people have found that if they make themselves wait a few weeks before buying a new television or new piece of furniture, they realized that they didn’t actually need it, and were able to save themselves the money they would have spent. Credit cards can otherwise make it too easy to buy.
  • Choose the right card. Finally, do a little research and find a credit card rewards program that can actually earn or save you money. The task is much easier if you have specific goals in mind. For example, if you would like to use a rewards program to get airline tickets for your family then search for a card that provides this. If you charge a significant amount on your credit card each month, then you might find a great deal of value in a rewards program. It might even be worth you having to pay an annual fee for the privilege of participating in a quality program with your credit card. If you don’t use your card quite so often, you should make sure that the points or credits you accrue don’t expire before you get a chance to save up enough for the reward you want.
  • Having the proper respect for your credit card will make it less likely that you get yourself in financial trouble. Credit cards are practically a necessity in today’s world, but you have the ultimate decision in how (and how often) you use them.

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