A lot of us are trying to use our credit cards less now days, but if you plan it out right it can actually benefit you to use them a little more. The first rule of credit is to never charge more than you can afford, its important to pay your credit card off in no more than 2 months or you will defeat the savings you can actually get. The second rule is to always use a card that pays you back for using it, something like Discover, American express, Capital One or Diners Club. If you use these two simple rules you can really make credit work for you, not only do you earn for your spending but if you have an interest bearing account at your bank you also get that as well.
The other bonus to using a credit card is there are many discount offers out there available to card holders. For example if you shop on line American Express and Discover have a specific web site for shopping through that will give you additional cash or points back. American Express offers double rewards on Travel and often upgrades in airfare and hotels for using their card.
The biggest thing to watch for is the annual fees, American Express is high but if you use the card enough you will still get the savings. Many companies will wave the annual fee for the first year. Notice I didn't mention the interest rate because I am talking about paying off your credit debt with in two months each time you use the card. If you pay it in full each month the interest rate won't apply. Also remember you don't need a ton of cards, I carry only three and they all offer some form of reward, the least being a store card that earns me a percentage off at a specific retail chain. There is no need to have individual cards for every little store you visit, I am always offered the opportunity to open an account at Macy's, Yonkers, Sears, JC Penney, Kohl's etc. but I decline because I get better rewards using the cards I have and the points/cash back builds up much faster. It is also better on your credit report to have a reasonable number of cards vs one for every store.
If you interested in finding a new card or just checking out how yours stacks up you can check Credit Card 321 for comparisons. If your interested in applying for a reward type of card be sure to check out the great article at Credit.com, there is also a lot of additional helpful information at this site to help you with many areas of credit and loan information. If you already have a reward card but can't pay it in full here is a great little calculator from the Federal Reserve that will show you how long it will take to pay off your cards balance.
I hope you all have a fantastic weekend!
We should have talked to you when we needed a new card for the shop! That CreditCard321 would have been handy to have. Good points for all.ReplyDelete