Effective Credit Card Use

Not Just Frequent Flyer Miles

Frequent flyer programs used to be one of the only ways that credit card holders could get affiliate bonuses just for using their credit cards. They were a way for credit card companies to reward cardholders who use their credit cards a lot because they travel. Now, of course, there are many kinds of rewards programs that credit card companies offer because they know that not everyone wants to be rewarded with free travel coupons. You can take advantage of this by using a card that offers you rewards on something that you enjoy, which might save you a little bit of cash off the back end.

However, you can save more money every month by using these cards for the sole purpose of accruing your points and then pay them off monthly. If you only buy things you would have bought with cash, you basically get your affiliate points for free when you pay off your balance every month. While it is true that your annual percentage rate will break down into 12 monthly installments, the amount that you save should easily offset this.

0% Balance Transfer Offers

You might notice a lot of programs that offer 0% APR or lower on balance transfers just for opening a new account. While this is obviously an attractive offer, there are a few things you need to do to make sure that you take advantage of these offers properly, instead of the credit card issuer taking advantage of you.

First of all, these offers are almost always temporary and variable. This means that while it may be 0% right now, this rate will only last for 6, 9, or 12 months when it will adjust to something much higher. This is not necessarily anything that should concern you, since some serious planning can easily help you pay off the balance within the introductory period.

Perhaps even more importantly than the idea that you can pay it off quickly, the most attractive benefit to consolidating cards’ balances is that you now reduce the amount you are required to pay every month, and how many payments you have to make. One payment is much easier to manage than three or four, even if that one payment is slightly larger. Plus, with only one payment, you will only be penalized once if you miss a payment, which makes it easier to recover from a bad month.

When you make a balance transfer, though, do not immediately starting closing down your old cards. One of the most significant benefits of transferring your balances is that you can instantly improve your credit. Your credit score is determined not only by how consistently you make payments, but also by your credit-to-debt ratio, which shows how much credit you have available. The more credit you have available, the better you appear to the credit bureaus and the more likely they will be to approve you for more if you need it.

Savings with Gift Cards

Credit cards offer you one of the most unique ways to save money by purchasing gift cards which you can use to buy things you that you want for yourself. Many department and specialty stores market their gift cards below retail value, which means instant savings for you. For example, they might offer a card worth $50 for $40 at the register, which saves you $10 immediately. When you pay off that balance at the end of the month, you save because the amount of interest you might have received will not cancel out your savings.

However, you can also get a bonus for this. When you use your credit card to buy gift cards, your credit card company will give you more rewards points towards your incentive program. This means that you instantly save on your purchase and accrue more points which you can use later to save even more money.

•   Miles Reward Credit Cards
•   Balance Transfer Cards
•   Discounted Gift Cards

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