A credit card can be a great financial asset when you know how to use it properly. There are lots of people who did not use credit card responsibly as they should and end up wrecking a large amount of debt. The following are 7 tips on how to effectively use credit card in 2018.
1. Pay Off Your Balance in Full at Month End
If you use your card to shop regularly, you should also pay off your balance in full every month. This prevents the balance from rolling over to the next month and letting the APR interest accrue. It only takes a bit of discipline to set aside the money at the month end.
2. Make Repayment to Your Credit Card Bill On Time
You should always pay your credit card bill on time so that you can build up your credit score. If you exceed the due date, you may get a raise in the penalty APR or be charged with a late fee. If you can’t afford to pay your balance in full, you should try to make the minimum payment.
3. Spend within Your Means
Spending within your means can prevent you from getting into debt. As a rule of thumb, you should stick to a credit utilization ratio of 30% or less for all your credit cards. This will make it easier to you to pay back your credit card.
4. Learn How to Earn and Redeem the Rewards
When spending money on credit card, make sure to that you are also earning rewards that can enable you to reap the most out of the rewards program. For example, if your card has bonus rotating categories reward program, you should try to spend money in the bonus rotating categories. Some cards offer a flat rate rewards on all purchases.
5. Know Your Credit Card Benefits
It is important to know what benefits the credit card has. Many credit card offers benefits like 24/7 concierge, car insurance, zero dollar liability, and extended warranty. This extra benefit is actually useful. For example, with extended warranty, you can get a free exchange when the merchandise is damaged even after the original warranty has expired.
6. Get a Card with Zero Percentage Intro Offer
It is best to apply for a card with a zero purchase intro where the interest fee is waived for a certain period. If you want to use the card to pay for something expensive, you can get a card with a long zero percentage intro for purchases. On the other hand, you should get a card with long zero percentage balance transfer offer to quickly pay off your debt.
7. Don’t Apply Too Many Credit Cards
Finally, you should not have too many credit cards in your wallet. Holding 1 – 2 cards in your wallet is sufficient for meeting all your expenses. Opening too many credit cards can have a negative impact on your credit score.