Monday, December 7, 2009

Credit Card Tips

Ever wonder why some experts recommend you to use your credit cards wisely. Below are some common sense tips that you will love to know about how credit cards work.

*Use First, Pay Later- Having a credit card allows you to purchase items first without affecting your cashflow, you are actually getting a loan from the bank. In a way, the bank pays for you first for the merchant while you pay the bank later.

If you have a large item, like a television, to purchase and know that your cashflow is tight, wait 1-2 days after your billing cycle date or statement date. Check with your credit card company, they will know. For example, your statement date 5th of June, you charge it to your credit card only on the 6th or 7th. In this way, your payment due date for that large purchase will only fall on the 29th or 30th of July, assuming 25 days grace period. That gives you almost 2 months of grace period!

*Credit Card Companies Love you- Focus only on ONE credit card, in this way, all your spending is accumulated on one credit card. Take out your wallet, pick one credit card that gives you the most benefit and destroy the rest, YES, cut them into half.

Listen, I have reasons for doing so. In this way, you can track your spending more efficiently since you have only one credit card, your credit rating by the bank will also improve. Also, in times of emergency, when you ask your bank for temporary credit limit increase, your chances of getting it will be higher as well.

*Rewards- Depends on your lifestyle, do you shop a lot or are you a frequent traveler, or you just want a credit card to purchase your daily necessities? Choose a credit card that suits you the most will let you earn your rewards points faster and you feel good knowing that you get rewarded for spending!

Don’t listen to the salesperson, he will tell you that you will need this and that, read the terms and conditions carefully and choose ONE credit card that suits you the most in terms of rewards payout.

*Card Fees- It’s an open secret that banks will waive your annual membership fees, if you are a high spender, just hint that you will stop using the card and they will grant you the waiver. Don’t threaten to close the account, that will leave a bad impression on you and your future interactions with the company will not be nice, you never know what’s recorded down by the staff managing your account. “WARNING, DIFFICULT CUSTOMER.”

*Late Charges and Interest Charges- Oh no, you overlook the statement and forgotten to pay. Be honest, do not lie, the bank has guidelines to waive your late charges and interest charges, have them to explain to you. In some cases, they will be glad to offer you solutions to aid your credit card usage.

*Always make Payment on time- At least the minimum payment if you can’t afford, this will allow your credit rating to be excellent. However, do not make only minimum payment for every month, the interest rate is high! But the company will love you for doing that. If possible, make full payment for your credit card bills every month.

Enjoy using your credit card!