Make Credit Cards Work For You

With all the hoopla about the pitfalls of using credit cards, savvy consumers have discovered ways to beat the high cost that is often associated with borrowing. Not only have they learned how to use a bank’s money for free but are even being rewarded for their effort. Here’s how.

Live Life through a Credit Card

Most people use their credit card for specific types of purchases, but consumers who want to beat the bank at its own game buy everything with a rewards credit card and pay the balance off each month. No matter what kind of reward program you choose (cash, travel or merchandise), you’ll be making money every time you use it and over time seeing a significant bonus. The best credit card for everyday purchases will most closely match your interests, spending habits and lifestyle. For some, having separate cards for travel and general purchases will reap the biggest rewards.

Take Advantage of Transfer Balances

This method isn’t totally free, unless you can find a free transfer offer, which are rare. By being alert and making the transfers in a timely way, however, you can see significant savings over time by avoiding interest charges, which are the biggest drain on credit accounts.

Begin transferring balances from accounts that you expect to see an increase in interest and other high-interest debt and loans and you’ll save significant amounts over time, eliminating interest payments.

Use the interest-free period to work on paying down your debt, while refraining from making additional charges on the card (new purchases have a higher interest rate) to see a significant decrease in debt. The most benefits are reaped with longer introductory offers like the Citi Simplicity Card, currently offering a zero APR for 21 months, longest in the industry.

Maintain Multiple Active Accounts

It may seem counter-intuitive to good financial management to maintain open credit accounts, but it’s true. By maintaining a large amount of unused, available credit, you’re credit score will rise, making future opportunities for borrowing easier. It’s okay to put your cards in a drawer and forget about them for a bit, but be sure to use them for a small purchase every six months to keep them active, even if you choose not to use them in the typical way.

The benefits of using credit cards are just too valuable to even consider not using one. Flexible payments that allow you to make payments over time, build a solid credit history, cash for emergencies and rewards for just using the card.