Credit cards stand as the most embraced method for paying expenses and utilizing rewards. Apart from various benefits, credit cards are widely misused, leading to financial disasters in one’s life. We have created this guide to help the users in getting the most out of their credit card, ensuring they reap the best benefits from it:
Keep Credit Usage Low
Users should never opt to reach the credit limit. Exceeding the balance in relation to total limit can affect credit score negatively. As a rule of thumb, balance should be less than half of the total credit limit allotted. More the balance more is the interest if payments are missed and carried forward.
Is It Really Necessary?
Various reward programs require annual fees. If a person prefers credit card to receive airline miles or rewards apart from cash back, then they should think how often they actually use the rewards.
If a person files once after five years, then a $100 annual fee will cost same as a ticket. It is the case for hotels, restaurants, and point based rewards. In case, a user is adapting or changing habits to maximize rewards and justify the annual fee, then chances are that they will less likely utilize them. People can shop for a card with no annual fee or cash rewards.
Pay Bills on Time to Increase Rewards
In case an individual receives reward card, but has balance, then they will perhaps cancel out the earned rewards. A free of cost plane ticket that costs about $200 does not worth actually to cause thousands of debt due to increasing interest. Thus, in case a person chooses the reward route, then they need to pay in full. If they cannot pay in full, then it is wise to choose a low interest credit card.
Pay Heed to Bonus
Sign up bonuses serve as the fastest way to reward points, miles, and tempting incentives. Customers are often surprised to discover that various cardholders never fulfil the steps to earn bonus. Thus, they need to claim what they were promised. They can ask to fill out the required survey or registration.
Choose a Secured Credit Card
A credit card works effectively to build good credit. In case, a person does not have any credit, then receiving a loan can be troublesome. However, people can choose to build a decent credit score by obtaining a secured credit card. But, they should make sure to make the payments on time, else they will be destroying their credit.
Utilizing Promotion Offers
Credit card providers often offer great promotions including gift cards, and discount promotions of up to 5% cash back on gas purchases. The trick is to claim them. These offers are often buried in the spam folder and never make their way to mailbox. Customers need to find out how a bank advertises their discount offers, and keep an eye on them. A bank may share promotions in form of banner in the dashboard of a credit card account online. Having said, if a customer does not visit their credit card account often, then they might be missing on great offers.
In addition to this, users need to expand their statement cycle. Many banks allow up to 21 days to pay bills once a cycle closes. It means that if a customer purchases a costly item at the end of a cycle, then they will buy additional time to pay bill. If customers are under strict budget and they need to make a purchase, then purchasing at the right timing can provide them with extra time to pay.
Whenever a person utilizes a credit card to purchase online, their security is compromised to some extent. Thus, it is essential to take time, change password and login information on frequently visited websites, and get rid of using same details in all websites.
Moreover, a user should avoid writing down credentials on a paper that is accessible to everyone. In case, they have a cheat sheet, then they should keep it secure at all times. Never put a cheat sheet on desk. When speaking on a call, never speak out confidential information loud. In addition, avoid storing confidential information automatically on sites that are most visited. This is due to fact that hackers can crack the confidential information including contact details, login details and more information. Make sure to give credit card information in a private location away from people.
Claim a Chargeback When Required
A chargeback can provide a customer with a refund by the credit card company whenever unauthorized charges incur by their credit card. Always ensure that a provider offers chargeback facility before applying for a credit card, thus achieving an ability to get hold of a provider for freezing an account when required. Users should never hesitate to chargeback request even if provide does not like it. In this way, they will protect their money.
Pay off Credit Cards with Higher Interest First
Utilizing credit card debt with higher interest cause bad debt that must be paid off at earliest. A reasonable way to pay such debt is to build a plan and time frame that will keep a user in track for debt repayment. Moreover, a user should make sure to pay off the higher interest debt along with paying the minimum payment of other debts (if any). In this way, a user will be able to build a remarkable credit score.