No one is likely to argue with the statement that the proper use of credit cards and effective cash management can lead to a significant improvement in your financial well-being.
In order to achieve this, it is only necessary to assimilate certain principles and to follow them steadily. At first, it’s all simple, but not all of us are able to do it.
There are two sides to using the credit card. You either begin to live off the money you don’t have and eventually end up with a huge debt. Or, you use the credit card to make life easier. Some even say that giving your kids a Junior credit card will make him more disciplined about money and teach to be independent.
Here are the best credit card tips for you to get control of your economic life.
Consider the options
As appealing as cash-back credit cards may seem, remember about the debt. You will receive a certain amount of money back every time you use a credit card, but that also means that you are required to spend more.
Debts have high interest rate, so you must first pay off your credit card debt. This means using your credit card only for emergencies and try to, in fact, save some money. In this case, you’d better apply for a low-interest credit card and have them help with your debt.
Some companies allow you a 0% interest rate for an introductory “teaser” period that is up to 21 months. So, if you are sure you can pay off your debt during that time, you can use the balance-transfer card.
Choose the card to fit your needs
If you have lucked out to pay off your debt in time, then you can apply for the cash-back credit card. It is always good to do some research and look into the details in order to choose the card that will serve you well.
By the way, if you are a student and experience transition period, you’re probably interested in a student financial aid. Here are the tricks to avoid the financial aid system pitfalls.
There are various cash-back credit cards schemes to consider. Whereas some cards will offer a definite percentage of cash-back on every type products and in different stores, others only allow a little cash-back for a certain number of expense categories. There is the third type of cards which will return a big percent on products, the selection of which will change at times.
Your spending habits play their role in the system as well. Think about how much money you spend and where you do it. Perhaps you will learn that general-use credit cards that cash-back at 2% will be a better choice for you.
Such retailers as Costco, Amazon and Target have created their own system of cash-back. If you purchase with these companies they will reward you with a generous percentage of cash-back or a discount.
The places you spend money at will allow you a different percentage of cash-back as well. Some people save more when they shop at the supermarket which returns 6% of spending. Other people use the gas-station more often, and when having got 5% percent of cash-back, they gain more.
Be smart about your expenses
Banks want you to spend as much money as you can, but don’t fall into the trap. Don’t spend money only to get more cash-back. This is not a win-win situation. Buy only what you need regardless of the cash-back percent the goods may offer.
Don’t be too tempted by the sign-up bonuses. Even if you are presented by a considerable sum of money to spend how you choose, you will be repaying much more in the future.
There is the upside and the downside to everything in life. Credit cards that help you save hundreds of dollars, are, in fact, luring you into the financial trap. That’s why you have to be considerate about your spending habits and choose the credit card wisely.