Staying out of debt should be one of your main focuses in these modern times, and in order to do so. you are going to have to be informed and make educated decisions. To help you stay on track, stay out of debt, and save money, here are a few tips to keep in mind when using, or not using, your credit cards.
Have an Emergency Credit Card
Overall it is a great idea to have money stashed away for a rainy day instead of relying on credit cards, but having an emergency card is still a good idea. Make sure this is a low interest rate card and you will be able to sleep easier at night as long as you use it properly.
Own Two Credit Cards
A lot of people own two credit cards in order to make the most of them. It can be a great idea to have a rewards card to use for everyday purchases and consistently pay off, and another card with an incredibly low interest rate for emergency purposes. If you have to make a purchase that you cannot pay off by the end of the month, then you should use your emergency card, and use your rewards card for everything else.
Resisting Rewarding Temptations
Rewards can be a great thing from time to time, and that is especially true if you use your rewards card properly. In most cases, these cards come with a higher rate of interest to counteract the rewards that it offers, but the rewards are not always as beneficial as we are made to think. The majority of cards will offer rewards that give you back approximately one cent for every dollar that is spent. If you can pay off your balance, great, but if you have trouble paying off your balance, you should resist the temptation.
Do not call the first credit card company that sends you a pre-approval, and be sure to research all of your options. RateRush.com offers a good look at many of the credit cards available and can help point you in the direction of one that can suit your lifestyle best. The more work you put into looking for the right card, the more money you will be able to save.
Request a Better Rate
If you have been a customer for a certain credit card for more than six months, then you have the right to actually ask for a better rate. Sounds a little bit crazy right? In fact, companies hear hundreds of these calls every day, and if you have been paying on time, then this method can actually work. These companies need to keep their best customers happy, and they will take extra measures to keep you on board. So make your payments on time, gain some trust, and then ask for a better rate, and you may just get what you wish for.
Avoid a Cash Advance
While missing a payment on your credit card is the worst thing you can do, accepting a cash advance is the second worst. These advances often come with a sky high interest rate that can be difficult to pay off. On top of that, when you start making payments, they will go to your lower interest debt first and allow your expensive debt to continue to pile up.
Pay off the Card Every Month
Credit cards will always have a higher interest rate than most other loans, so you should never plan on carrying a balance if you do not have to. If you do not have the money to make an important payment, then consider a line of credit from the bank or obtain another kind of loan. It may take a bit more time, but will save you lots of cash thanks to lower interest rates.
Do Not Miss Payments
A missed payment means that you will be hit with a late fee and that your interest rate will increase dramatically. It also affects your credit score negatively, which makes getting any other kind of loan difficult. If you want to save money on your credit card, and in general, then you need to promise to yourself that you will never miss a payment.
Credit cards are getting a very bad rap in the current economy, but there are still a lot of people capable of using them properly and benefiting from the service that they provide. Without credit cards at all it, would be next to impossible to shop on the internet or afford to buy some larger necessities that we may need. On top of that, using a credit card properly allows a consumer to build up a credit rating that can help them secure all kinds of loans down the road.
Use your credit card properly, and you can learn how to save money on credit cards and benefit from that piece of plastic that is taking all the heat.