Cashing in on Credit Cards
Credit cards have been portrayed as both a help and a hazard. It is extremely tempting to swipe your card and buy everything you have ever desired. There is a certain magic associated with the words ‘charged to your card’. Unfortunately, every fairytale has its pitfalls. If you are not careful, credit cards can swallow your income and savings. At the same time, they are not all bad. There are certain situations where credit cards are fantastic. The trick is figuring out when and where to burn your plastic.
Two is Enough
According to research, no one needs more than two credit cards. Though it is tempting to sign up each time you find a card with a bigger spending limit or lower interest, the trick is to pick two and stick to them. Select these two cards carefully, keeping in mind the kind of spending you do. If you use your card to book flights all the time, perhaps you had better look out for a card that offers special rates on your favorite airline. If you have earmarked a neighborhood store that you shop at most of the time, pick a card that gives you a discount there. This is good planning, rather than choosing a card and then deciding to shop at stores that give card users a discount. You should be in control of your card, not the other way round.
Free is Good
Freebies are always welcome, no matter how big your salary is. Why pay when you can cash in your credit card points and walk away with something useful? Some necessities with extravagant prices are much more affordable with the help of your credit points, for example a sturdy suitcase or a fridge. Some stores and services have tie ups with certain credit cards. This is something to take into consideration when you choose your credit card.
Making the Payoffs
Bills, much like people, are not always of equal stature. Instead of splitting you money between all your credit card bills, choose the ones that are the most pressing. The credit card with the highest interest is generally the bill that is the most urgent. A large interest means a large bill. Don’t make it worse by delaying your payments. Make your minimum payment for the other cards.
Make Your Demands
If you are a long term customer, you have a little more leeway than if you just signed up for a card. Credit card companies are, in general, anxious to keep their customers. So it should be safe for you to make a few demands of your own. Don’t be a diva and complain each time you have to make a payment but once a year, maybe during your biggest financial crunch period, you can ask your customer service representative for a few perks like a lower interest rate, a waiver of the annual fee or cancelling a pesky late fee.
The ATM is not your friend
Although your closest ATM may feel like your new best friend, especially on nights out, you should think twice before withdrawing cash using your credit card. The logic behind this caution is that most ATMs charge you a fee of 2 to 4 percent when you withdraw. The interest on the amount you have withdrawn comes into play soon after this. Using your credit card to directly purchase something is different as the charges will only kick in on your next billing cycle.
Double Check Your Bills
Mistakes do happen. Scrutinize your end of the month statements and make sure you remember all your charges. If something looks unfamiliar, be sure to follow up on it and clarify whether you made the charge in the first place. Call the number associated with the charge description and make sure that it is something you purchased. Sometimes the vendor will seem like an unfamiliar name. If there has been a mistake, call the credit card company immediately and notify them. There’s nothing worse than paying for something you did not actually buy.