Smart Ways to Benefit From Credit Cards

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How to Benefit From Your Credit Cards

       There are many benefit of credit cards if you are disciplined with your spending, pay your card balance off in full every month and understand how credit cards work.
If you are not disciplined and find your credit card too tempting, then you might be better off cutting it up. Credit cards can get you into financial problem, particularly if you are an impulse buyer. And of course, if you already owe money on your credit card, then paying it off should be your top priority.
Using a Credit Card and repaying on time provides a boost to your credit score. A good credit score means you will be able to obtain Loans and Credit Cards quickly in the future. It’s one of the Credit Card benefits cash or cheques cannot offer!
Here are several tips for how to benefit from your credit card.
Eliminate Annual Fees
You likely looked into this before you applied to your current card of choice, but is your credit card still free to own? Many institutions started charging annual fees, and there’s a chance that yours does now as well. With companies likely adding the annual fee as a line item on one of your monthly bills, it may go unnoticed, so double check to make sure.

Pay Your Balances Off Each Month
I contemplated whether to put this one in, because it’s obvious. But it’s so important that everyone needs to hear this again and again. Don’t use a credit card unless you can pay it off each month. Got it? Now go read it again, and follow the rules.
If you don’t believe that it’s possible to live without borrowing, just remember that people were fine before the invention of debt! If you can’t afford it, just don’t buy it.

Signup bonuses
Several credit cards offer attractive bonuses that reward you for signing up with them, such as large amounts of bonus points, complimentary flights, low or nonexistent fees and other long-term perks, such as promotional and reduced interest rates.
However, not all cards with a signup bonus are good value, so you need to have a close look at the terms and conditions before applying. Chances are, there will be certain requirements that need to be met, such a minimum expenditure in the first few months. If these requirements are in line with your spending habits, then a credit card with a signup bonus can be excellent value.
You can read the article below to see what high-rated credit cards are currently offering signup deals, or you can look directly in the table below.

Stick With Cash-Back Rewards
There are zillion different ways to redeem your credit card rewards, but it’s probably best to stick with getting cash (or perhaps a statement credit) unless you were going to need to use it anyway. For example, getting a free airline ticket is good if you were going to buy the exact same ticket for the exact same price, but getting a $50 gift card and ending up buying $73.28 worth of useless junk is not worth it.

As opposed to Rewards cards, which earn you points for spending money on certain things, cashback cards pay the money back into your account. These cards will save you money based on your monthly expenses, and the amount you’ll get back will depend on the credit card’s cashback rate. The right card will earn anywhere from 1% to 5% back on your purchases. Depending on where you shop, certain places will even give higher rates of up to 10% for certain purchases during bonus periods.

Know All the Benefits You Are Getting.
It’s always a good idea to know every benefit that your card is providing. In addition to reward points, some cards get you into airport lounges, while others will double the warranty of a product. By knowing all the benefits, you won’t be paying extra for something that you can get for free. For example, one of my credit cards provides rental car insurance.

Write Down Why You Applied for the Card in the First Place.
A good way to remember all those benefits is to actually write them down in simplified form somewhere, so you can look at it once in a while to refresh your memory. I know it is a bit of work, but I applied for one of my cards eight years ago. Would you remember all the details from eight years ago? Or let’s say you applied for a 0% balance transfer credit card. Now that the introductory 0% APR period is over, do you still need to keep it?

Rewards programs
Lots of  credit cards that have great reward programs, but they need to work for you. There is no point overspending or buying things you don’t need just to get points. So, think about how you use your credit card and then choose which program would benefit you most. You can spend credit card rewards points on all sorts of things, from flights and car hires to petrol and grocery shopping.
Also, check if there is an annual fee for the card. Sometimes these can be paid for with points but you need to make sure you would earn enough points in the year to pay off the fee and get something with the leftover points.

Complimentary travel insurance
Most credit cards come with a number of consumer protections, including rental car insurance, purchase protection insurance, extended warranty insurance and even travel insurance. According to Canstar data, more than one in five visitors to our site look for cards with travel insurance attached, making it one of the most in-demand features around.

Frequent Flyer miles
If your lifestyle is one that involves a lot of travel and time spent in airport lounges, then a Frequent Flyer credit card might be the right option for you.
These cards are very similar to rewards cards in that you earn points by making purchases, but they are made with the purpose of spending said points on flights, lounges and concierge services. You can also spend points to upgrade your existing economy seat to business and first class.
However, if you like spending points on things like gift cards and everyday stuff, then a Frequent Flyer card probably isn’t right for you, as the rates for these purchases tend to be comparatively poor.
You can compare Frequent Flyer cards on the market with Canstar, by using the comparison button below or by following the links in the table.

Build your credit score
Having a credit card can help you to build up your credit history and a credit rating – if you make sure you pay off the balance in full every month and keep your spending at a low level. A good credit score will make it much easier and less stressful to apply for various types of loans in the future, such as car loans and home loans, so practising good repayment habits with a credit card can be a good way to build a positive credit score.
Ensure that you use it wisely though, so that the value it adds to your credit rating is positive. If you miss a few minimum monthly repayments, this will be a serious black mark on your credit history.

       The Credit Card benefits are too great to ignore. Plus with more banks offering them: the process has become more straightforward, and there are a vast variety of options to suit every lifestyle and spending tendency.

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