Savvy Spender: Simple, Smart Ways to Make the Most of Your Credit Cards
With their vast array of special perks and member benefits, credit cards are an appealing financing option for modern consumers. Unfortunately, when left unchecked, credit card debt can easily spiral out of control, leaving cardholders with crushing financial obligations and a mountain of stress. When used correctly, credit cards provide a fantastic tool for managing personal finances and building strong credit, but it is essential to develop an effective strategy for using your cards. Before you whip out the plastic on your next stop at the supermarket or shopping mall, consider the following simple keys.
Research Your Options
Credit card rewards programs offer an enticing assortment of benefits for using your card. Many card issuers provide cash back, frequent flier miles, and special discounts for using your credit card on a daily basis. Before opening a new account, take the time to research the various credit cards available. Be wary of low introductory rates that skyrocket after a few months, and carefully weigh the pros and cons of credit cards that carry steep annual fees. If you are diligent with your research, you should easily find a card that rewards you handsomely for your expenditures.
Pay Your Balance In Full
It is an incredibly simple step, but many consumers overlook the importance of paying a card's balance in full each month. Unless you receive a special financing offer and benefit from a 0% APR for a period of time, there is no valid reason for carrying a card balance. Not only does carrying a balance result in financing charges, but it can also hurt your credit score. Plan to charge only what you can realistically pay off when you receive your bill each month.
Track Your Purchases
While it may feel tempting to throw caution to the wind on your next shopping spree, it is vital to pay close attention to your purchasing habits and monitor your spending. Some consumers use spreadsheet software to easily track their purchases while others rely on handwritten records and printed credit card statements. Regardless of what method works for you, it is important to keep a running tally of your purchases in order to protect yourself against billing discrepancies and keep your spending in check.
If you are looking for an easy way to monitor spending, ask your bank about their mobile banking options. Many credit card companies now offer apps for your smartphone or tablet. These apps notify you as soon as a purchase is made with your card, and many allow you to make payments, transfer balances, and track your reward progress.
Of all the benefits credit cards offer, the consumer protection they extend is perhaps the most underrated perk. Your credit card protects you against fraudulent purchases and even ensures service guarantees in some instances. For example, if you purchase a service or product that is not delivered according to your expectations, many credit card companies serve as an intermediary to resolve the conflict with the retailer. Additionally, some cards provide complimentary insurance for travel purchases and car rentals. Read the fine print of your card contract to ensure you understand the terms and conditions governing your card usage.
From savvy businesspeople to everyday moms and dads, credit cards are powerful finance tools that simplify the spending process. When used correctly, you can even reap great rewards from your cards. By taking the time to learn more about your cardholder policies and making smart decisions at the cash register, you can protect your finances and ensure you are making smart decisions for the future.