Credit cards can be invaluable if you use them correctly. You will be able to enjoy incredible perks and high cash back, build credit, avoid fees, and so much more!
In this post, I’ll share 5 brilliant tips to help you get the most out of your credit card.
1. Look for cards with perks that appeal to you
Whether its cash back, miles, points, or something else, you should choose a credit card with perks that are most relevant for your lifestyle.
If you are an avid traveler, then a miles credit card might be best; but if you spend a lot on eating out, then a credit card that gives high cash back at restaurants might be a better option.
The idea is to choose a credit card with perks that would be most beneficial to you and not just go by the dollar value.
2. Wisely rotate your credit cards
Like I mentioned in the first point, different credit cards have different rewards and perks, and you should use the right credit card at the right time. It is okay to have more than 1 credit card if you know your spending habits well and use them wisely.
If you use your car extensively, you can choose a credit card that gives extra cash back at gas stations. And if you regularly shop at a particular store, it might make sense to get the store’s credit card as it often has additional perks and cashback that your regular credit card may not provide.
3. Use hidden credit card perks
Everyone knows the obvious perks like points and cash back. But, if you look closer, most credit cards have incredible perks that are not apparent!
For example, if you book a rental car using your credit card, it is likely that the credit card has built-in rental car insurance – no need to buy overpriced insurance at the car rental!
When shopping for electronics, your credit card may have built-in extended warranty for products purchased using that card.
There are some credit cards that allow you to get a full refund on trip cancellations even if the airline or hotel doesn’t cover it.
Find out what perks your credit card has and use them to your advantage.
4. Avoid sneaky fees
A lot of the credit card fees sneak up on you unexpectedly, but they can easily be avoided with some smart planning.
For example, if you always forget to make the payments on time, simply enable automatic payment to avoid late payment fees.
When traveling abroad, you can avoid foreign transaction fees by only using credit cards without this fee, and if you are constantly penalized for going over your credit limit, you can set up alerts to warn you when you are nearing your credit card limit.
5. Build credit quickly
Who doesn’t need good credit in their lives? We all know building credit takes time, but a credit card is one of the best ways to improve your credit score and build credit.
Just make your payments on time every month – ideally in full – and that would help improve your credit score.
For more ways to improve your credit score, read our post called ‘5 Easy Ways to Improve Your Credit Score’.
These 5 tips will certainly help you get the most out of your credit cards.
But remember, all these tips wouldn’t really matter if you carry a credit card balance from month to month – because the interest you would have to pay on the balance would more than outweigh all of these benefits combined.
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