You get your adrenaline rushing as soon as you get a hold on your first credit card. It is the most convenient piece of plastic, which has become a way of life for most for the people around the globe. However, it is important to keep in mind that “all that glitters is not gold,” as credit card comes with both benefits and drawbacks.
This article will give you a detailed insight on the best ways, which can help you deal with credit cards in order to keep yourself out of any financial calamities for the future.
Things to Look For When Selecting a Credit Card:
It is easy to apply for a credit card just because the offer looks good, but it is important that you should be aware of all the factors, which make a credit card the right option for you. Before selecting the credit card, here are the five things that you should check:
1. Look Into The Type Of Billing Method Used
Some card issuers are moving away from the average daily billing cycle and switching to the two-cycle way of calculating the interest earned on balances. This makes it difficult to get out of credit card debt once you attain it, as the balance gets higher each month.
Therefore, check out the billing terms and conditions to know if you are getting into any hidden fraud.
2. Shop Around Before Applying for a Card
It is always advisable that you shop around when selecting the credit card instead of falling prey to the extensive promotions. Compare credit card offers before signing up for anything and select the card according to your shopping habits
3. Transferring of Balances
Try to opt for cards that give you the option of transferring to another account. The transfer balances of a high interest rate credit card to a lower interest rate credit card can help you cope up with bad financial situation and can influence savings.
4. Price Protection Offers
Each credit card company will have different program stipulations. Companies, which offer price protection, will offer you a refund if an item bought with that credit card drops in price. This time is usually within 30 or 60 days.
5. Rewards on Credit Cards
A number of credit card companies offer cards with rewards on making purchases. However, such credit cards have generally about 5-7% higher interest rates and are probably not worthwhile.
Credit card rewards are the best for the vacations. You can get the highest perquisites of such card while you travel. Check out below mentioned tricks to know how to make most efficient use of the credit card.
Making Efficient Use of Credit Cards Rewards:
The use of cash or debit cards while on vacation can be beneficial, when you travel in the following ways:
1. Accumulating Air Miles
The benefit of credit card rewards is that you can use them when you are traveling through air. You can also redeem miles for a range of other related services, such as accommodations and car rentals, etc.
2. Fuel Purchase
Save up some money on the gas stations across the U.S. with the help of reward points offered by gas companies on credit cards.
3. Affects on Exchange Rates
The exchange rates for credit cards are better than the rates of currency and paying with the cards offer cardholders unique benefits.
4. Cash Back on Rewards
Different Card Companies offer different cash back rates on the purchase of items from the participating retailers.
5. Other Benefits on Cards
Other small profits, which you can attain from your credit card company, may include:
- Travel accident insurance
- Travel inconvenience insurance
- Return merchandise protection
- Emergency card replacement
- Emergency help abroad
- Exclusive deals and discounts for cardholders, etc.
It is safe that you inquire your company about all kinds of reward benefits you can get.
With all these benefits lined up for you, there are chances that you may get carried away with the spending on credit cards and end up in debt. Below mentioned points will help you analyze your situations and make room for savings as well.
Tricks To Save Money And Avoid Credit Card Debt:
Make most from your credit card with the help of some optimal strategies, which will help you use the credit cards with most ease:
Do not own too many cards
Owning of too many credit cards does not only result in the overusing of your credit, but it also prevents you from optimizing your rewards on one card.
Keep your Credit Card Active
To avoid getting any negative report, it is important that you maintain fees for cards before your account deems dormant.
Pay More and On Time
Avoid interest charges by paying your balance in full. Do not wait until your payment is due if you can make the payments right away.
Credit Card Reliance
Try to curtail on making payments on credit cards all the times. Do not use credit cards in place of funds, cash, money orders, wire transfers, and for other money related activities.
Taking Cash Advances
The interest rates on cash advance may be null but the flat rate fees are high. Therefore, it is better to avoid cash advances.
Lowering Interest Rates
Get advantage from your card issuer on interest rates if you have a good history and get cuts on debt amounts.
The crux of the above discussion is that taking control of your credit cards is essential to remain out of debt and to attain the benefits, which the card companies have to offer. To minimize the dangers to your financial health, it is important to choose your cards wisely, think twice before making use of your credit reward points and, most importantly, do not carry a balance. Remember; don’t let the cost of your card get out of hand.