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Taking Advantage of All That Your Credit Card Offers

Aug 15, 2008
There are many advantages to using a credit card for daily purchases, such as groceries, gas for the car and small purchases. They eliminate the need for carrying money with you all the time or the need for running up charges on your bank account by constantly using your debit card. Most hotels, for example, will not take a reservation without a credit card number that they can place of file even if you do not plan to use the credit card to pay for the accommodations. When you books flight online or make any purchase online, you cannot do so without a valid credit card. In this way, credit cards do give you security in knowing that you can make a purchase when you need to.

The important thing to know about taking advantage of the credit card is how to manage it properly. In order to avoid paying interest charges on the unpaid balance, pay off the balance at the end of the month or before the due date on the statement. You wont incur extra charges, not will you be late with your payment. This reflects well on your credit record when you do need to borrow from a lender.

If there are times when you are unable to pay the unpaid balance of the credit card in full, make, it is a wise practice to pay more than the minimum payment. This payment includes the interest charged on your unpaid balance and only a small portion of it will go towards paying off the balance. Anything that you pay over and above the interest for the month will help top reduce the amount you owe because it is applied directly to the balance. By paying only the minimum payment, it will take you a long time to pay of the credit card.

Compare the interest rates charged by different credit card companies to make sure you are paying the lowest rate possible. There are many companies that offer promotions in which you can pay off your outstanding balances on other cards for 0% interest or a low interest rate for an introductory period, which is usually six months. Even if you know that you will not be able to pay off the balance in full in this period, you can benefit from switching to this new card because by making your payments for six months you will drastically reduce the balance on which interest is charged after that time. You can also take out a loan to consolidate all the balances on your cards if you have more than one. This way you only have one monthly payment that is lower than the combined payments of all the cards.

Before you pass over your credit card to make a purchase, ask yourself if it is something that you need or if it something you just want to have. When you take all of your purchases seriously, you will be able to resist the temptation to make a frivolous purchase that you will later regret. Even though you do not have to pay the money for the purchase right way, you will have to start making payments when you credit card statement arrives.

Many credit cards come with other benefits such as accumulating points you can use toward other purchases. This is the case with many of the credit cards offered by large companies. When you make a purchase a percentage of the amount goes into a points balance. Then when you shop at that store again, you can have these points credited toward the cost of your purchase, thus reducing the price you would have to pay. If you are making a large purchase and you do have the cash available to pay for it, it would be to your advantage to use your credit card just to obtain the points. Then after a few days when the purchase has been added to your account, you can pay off the balance. This way you do not pay any interest charges and you get the points, so it is better than paying with cash. For large purchases as well, most businesses prefer to take a credit card rather than a personal check, so you may not have the option of paying by check.

If you travel a lot, you can also benefit from a credit card that gives you air miles for the money you spend. When you accumulate enough air miles for a trip, then you basically have the trip free because you have it already paid for. Just keep in mind that in order to use the air miles you do have to book well in advance to fly at the lowest number of miles. Most of these cards do come with an annual fee, but it pays to shop around to find a card with the lowest annual fee or no fee at all.
About the Author
Peter Kenny has been writing financial articles for 10 years and is a writer for The Thrifty Scot, please visit us at Compare Credit Cards and Credit Cards
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