A credit card can be a great financial asset if you use it properly. However, used irresponsibly, credit cards can take you down a dark spiral of debt and financial uncertainty. If you have a credit card, adopting a few habits can help you maximize the benefits they offer. Here’s how you can make your credit card work for you.
Avoid Carrying a Balance
Credit card balances can attract pretty high-interest rates. To avoid paying this, it’s best to pay off your credit card bills in full every month.
Don’t Default on Payments
If you delay paying your credit card bill, the lender may charge you late fees and also report your payment default to the credit bureaus, which will, in turn, cause your credit score to dip.
Use Your Credit Card to Earn Rewards
If you have a rewards card, it’s a good idea to familiarize yourself with the card’s rewards program so you can take advantage of it. So, for instance, if your card offers cashback on dining expenses, it’s a good idea to charge all your dining expenses to the card.
Opt for Credit Cards That Offer Perks
Even if you don’t want to sign up for reward credit cards, it’s still a good idea to look for cards that offer perks like rental car coverage, free travel insurance, and extended warranties, among other things.
Look for Balance Transfer Cards
If you are carrying a high-interest balance on your current credit card, you may want to transfer the balance to a credit card with an introductory 0% APR.
Take Advantage of Price Protection Benefits
A number of credit cards offer price protection. So, if an item you purchase gets marked down in a few days, you may be able to claim the difference in price with your credit card.
Choose Cards Without a Foreign Transaction Fee
While you’ll likely be able to use your credit card abroad, you may need to pay a foreign transaction fee. So, if you travel abroad often, make sure to opt for a card that does not charge a foreign transaction fee.
No matter what you do, ensure that you don’t get into the habit of carrying debt on your credit card!