If the thought of your monthly credit card bill causes you to panic, there’s a good chance you aren’t using your credit card the right way. Here’s what you can do to maximize the benefits of your credit card.
Select the Right Card
Before getting a credit card, assess your lifestyle and the benefits and pick a card that offers benefits and rewards that you can make use of. For instance, if you dine out frequently, pick a credit card that offers discounts or rewards when you charge your dining expenses to the card. Make sure to also shop around and compare different cards before you select a particular card.
Pay your bills on timeAlways pay your credit card bills on time. If you miss a payment deadline, your creditor may charge a penalty and also report your payment default to the credit bureaus, which could then affect your credit score. To keep this from happening, set up a reminder, or automate your credit card payments.
Settle Your Balance in Full
Credit card users are charged exorbitant interest rates on any outstanding balance they may carry on their card. Given this, make sure to pay off your balance in full whenever possible.
Watch Your Credit Utilization Ratio
Although you have a pre-approved credit limit, always try to keep your credit utilization low. The reason being, a high credit utilization score can adversely affect your credit score.
Look out For Credit Card Frauds
Credit card frauds are not uncommon. So, make it a point to check your credit card bills and statements and correct any discrepancies you may find.
Make Use of Benefits
Credit cards offer several benefits like extended warranties, purchase protection, travel insurance, rental car insurance, etc. It’s a good idea to make use of these complimentary benefits.
While credit cards offer several benefits, it’s still a good idea to not get too many cards. Not only does having too many cards increase chances of excess spending but it also puts you at risk of theft, loss, or misuse of the card. So, assess your needs and get a few cards that you know will be of use.
