Having credit cards do not necessarily mean that you are in debt, contrary to popular belief. It is possible to have credit cards and manage them effectively so that you stay out of debt and yet do capitalize on the best deals. In effect, you can actually improve on your credit rating and even make a little money if you know how to use them. Taking a look at the following five ways will give you a good idea of how to make the most of your credit cards without breaking the bank and getting into debt. It is time that they started working for you!
1. Check out the offers and deals on individual credit cards before you take out a new one – This is an absolute must if you want to make the most out of your credit cards. The first thing that you should check is the bottom line interest that you will be expected to pay every year, just in case you do have a balance at any given time. When you have narrowed your choices down to the ones that will be the most economical in the coming years then you can take a look at the actual offers that are on. If you have a big occasion coming up and need to pay for several different things that are related to it then you may want to look at 0% purchase offers. If you have a balance that can be transferred then you should look at the 0% balance transfer rates. Then there are also cards that offer anniversary rates and enhancement packages that may suit you better. However, the underlying fact is that you should choose the offer or package that best suits your circumstances if you want to benefit from it in the long run.
2. Use cash back cards to their greatest effect – Using cash back cards is usually completely poor value. That is because the cash back rates are not even worth bothering about. 0.5% cash back on your purchases is not worth the paper that it is written on. However, if you look hard enough then you will find offers that are better than that. They may only last for the first year or so of the card’s lifetime but they are worthwhile, with some being as high as 5%. You could then make some serious money on your cards if you so wish. However, be sure to examine all of the terms and conditions that are attached to cards like this because there is often some sort of disclaimer or exclusion that applies so be careful and make sure that you stay within it.
3. Contact the credit card companies and see what you can get – You have heard the stories about individuals phoning up insurance companies and mobile phone companies and threatening to close their accounts because someone else offers something better. Well, the same applies to credit card companies. Existing companies can offer better rates and special offers for those good customers that have found a better deal elsewhere. They may not offer it unless pushed, but if you base your phone call on actual deals then they are more likely to match the offer in question. However, if you do this then be sure to get it all confirmed in a letter and sent out to you. That letter would then be legally binding just in case they try to challenge the deal that they have given you further down the line.
4. Always pay the bills off in full when you get them – This way, you do not run up any debts, do not have to pay interest on your credit card balance and have a clear card to spend on again, but the main point is that you can have the money to pay off your credit card in another account, whether current or savings, that does earn you interest. That way, you benefit from the money as long as possible and have ultimately lost nothing as a result!
5. Finally, the simplest advice of all, do not spend too much on your cards. If you do then all of the above will not matter. You have to control your spending in order to make some money from them!