subject: Get The Most Out Of Your Credit Card [print this page] Using a credit card to make a purchase is relatively easy. The average person can get approved for a card pretty quickly and start making purchases right away. However, not everyone gets the most out of their credit cards on a regular basis. There is a right way and a wrong way to use credit cards. Here are a few tips to help consumers get the most out of their credit cards.
Take Advantage of Rewards
One of the most attractive features of having credit cards is the rewards programs. Many people fail to take advantage of these rewards programs and they are essentially leaving money on the table. Rewards programs make it possible to get something for nothing. When a cardholder uses his card to make a purchase, he will automatically earn rewards points. In some cases, rewards points add up on a scale of one to one dollar spent. In some cases, certain categories earn double or triple points instead of the normal one point per dollar.
Once these points are earned, they can be used to buy many different things. In some cases, the cardholder could take a completely free vacation with his points. He might be able to buy a big screen TV with the points he earned. If these points are not used, it's like ignoring free money.
Don't Leave a Balance
Making purchases with credit cards is easy, but many consumers end up leaving balances on their cards from one month to the next. When a balance is left on a card account longer than a month, the card issuer charges interest on the balance. If no balance is ever left on the card, the consumer will not have to pay interest on these purchases. This has the potential to save the consumer quite a bit of money over the life of the card.
Make Payments On Time
When it comes to making payments to credit cards, they should always be made on time. When consumers get in the habit of making their payments late, it can significantly hurt their credit and end up costing them a lot of money. On the front end, the card issuer will charge the consumer a late fee. This late payment will then be reported to the credit bureaus at the end of the month. This will hurt the consumer's credit score over the long-term. At that point, the consumer will have to pay higher interest rates on loans and higher deposits. It can even lead to higher insurance premiums for the individual.
Be Aware of Interest Rate
When using credit cards, consumers also have to be aware of the interest rates that they are subject to. Card companies make it a little bit confusing when trying to figure out which rates they charge. In many cases, they offer zero percent introductory interest rates or at least low introductory rates. When the consumer has multiple credit cards and needs to make a purchase, he should find out which rates are being charged by each card. This way, he can put the purchase on the card that charges the least amount of interest. If he plans on paying off the debt within the month, it will not matter. However, if the debt will be left on the card for a while, knowing the interest rate is essential.
