Credit cards are useful tools for enhancing your everyday life and reaching your financial goals. If used properly, credit cards provide security and build your credit. Once you have your credit card, there are number of ways you can use it. Some of which may surprise you.
1. Pay Off Other Cards
Some credit cards offer rewards for transfers, and even zero interest for a certain length of time, which is like borrowing money for free. This lets you pay off your other debt faster and at a lower cost.
You can use the right credit card to pay off other high-interest debt, lowering the amount you will pay over the long term. The reason being, the cards should have lower rates than general loans and other debts.
Even if the card doesn’t offer a reward or zero interest for balance transfers, you can still use a lower interest card to pay off a higher interest one. Just make sure that the fees involved do not exceed the amount of interest you will be saving.
2. Pay Your Bills
You can use a credit card to pay your bills, and even set up autopay to make sure they are never late. Then even if you don’t have the money in your bank account on the correct date, credit cards help you avoid insufficient funds and bounced checks. Then you can pay off your credit card bill at the end of each month.
This often works out better than paying bills individually with your bank account and having to remember pay-by dates. Everything from your car insurance to your rent can be paid with your credit card.
Credit cards are one of the best tools you can have when you travel. They let you put all of your travel expenses in one place, then pay them off in one lump sum or a few chewable payments. This lets you do a couple of other things as well.
- Actively Track Spending
- Get Expensive Moving/Travel Supplies You Otherwise Couldn’t Afford
- Build Your Credit By Paying Off Debt
The other thing a credit card can do for you while you travel is to earn you travel rewards. Many cards are tied to airlines, hotel chains, or even rental car companies, and you earn points every time you use the card for those types of purchases. This can help you save money with cheaper tickets, travel insurance, or even earn you cash back, if you have the right card that is.
4. Protect Your Bank Accounts
There are many situations where you should use your credit cards rather than debit cards, especially when you travel. The reason is simple: it enables you to protect your bank accounts.
If that retailer where you are using your card gets hacked, they have your credit not your debit card information, and that protects you accounts back home. So while you can dispute charges either way, you won’t be out the money in your savings account during the time you are waiting for a refund from your credit card company. Since you saved all of your actual receipts, it’s on the credit card company’s end anyways.
You can also use credit cards with services like Apple Pay, Samsung Pay, or Google Wallet. This keeps both your banking and credit card information away from hackers and prying eyes. These also help you see all of your transactions in one place, and you can categorize them.
5. Earn Points and Rewards
Many credit cards have rewards and points program that earn you everything from the travel rewards mentioned above to cash back on purchases. Some even offer free products and services.
There are a ton of cards out there, and choosing the right one can be hard, but you can compare cards and reward programs online to see which card best suits your needs.
Always count cost. The rewards cards often come with an annual fee, so be sure the savings you get is higher than the annual fee on the card. Also be aware of interest rates and make sure that the rate you are paying on the card doesn’t exceed the return you get from rewards points.
There are a number of ways to wisely utilize credit cards, and these five are simply a start. If you use your credit card with care, you can unlock a great asset to your financial future, protect your bank accounts, earn you rewards, and even pay your bills. Find the right card for you, and apply today!
How do you utilize your credit cards? Do you have any strange, but useful tactics for credit card usage? Leave us a comment in the section below.