Many people are drowning in credit card debt and the common advice of financial advisers is to rip their credit cards and put an end to all their spending. Indeed, credit cards are seen in a bad light by many people struggling with debt.
Credit cards can be helpful but only if you know how to use them responsibly. If you are one of the fortunate not carrying any consumer debt on your plastic, you can make your credit cards benefit you by making the most out of credit card rewards.
Aside from the coveted 0% interest, you can maximize credit card rewards in the following ways:
1. Never carry a balance as much as possible – For as long as you’re paying interest on your card, you are actually giving back whatever credit card rewards you’ve “earned.” Always remember to pay your balance on time. And the best way to do that is by only borrowing what you can comfortably afford now.
2. Specialize your credit cards – Whatever happens, don’t distribute charges to different credit cards. Instead, focus payments on one ideal credit card. For instance, do you like to travel? Why not accumulate points on the credit card that rewards you the best mileage. And again, be sure to avoid delinquent payments.
3. Pay household bills in one credit card – This credit card reward advice is similar to the second tip. Unknown to some, many places actually accept credit card payments for household bills, such as cable, Netflix, cell phones and most other bills. By using one credit card to pay most or all of them, you are actually accruing many reward points in a year for that credit card. If you’re using your mileage credit card, you could be setting yourself up for a very cheap vacation at your favorite location. Remember, since household expenses take quite a chunk of your budget, be sure to swipe wisely for other expenses to ensure that you don’t bloat up your credit card bill beyond your means. The key is to be able to make payments on time at all times to take full-advantage of credit card rewards.
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