Certainly all of us have heard about the misuse of credit cards that is going on today. It goes on around all of us - and it is possible that even you are guilty of not using them to your advantage. Instead, money could be going down the tubes unnecessarily. But the good thing is that today can mark the first day when you can actually begin to use them to your advantage. Here are some tips on just how to do that.
1. Examine Your Credit Card Bills
It is especially important to note the rate of interest that you are paying each month, as well as the cost of any late fees. Of course, the rate of interest means nothing if you pay your bill in full each month and on time. Then you pay no interest at all. If you pay late on a regular basis, then you already know that it adds up to being a lot of money going down the tubes.
2. Understand How Credit Cards Work
If you will come to look at a credit card as a tool, instead of as a Santa Claus, which gives you the privilege of buying things you really can't afford, then you will start to think clearer, and be able to save more. Credit card companies really do not make money on anyone that pays their bills on time and in full - unless there are annual fees. This means, then, that it is those who habitually pay late or keep balances on their credit cards that make them rich.
3. Consider A Credit Card With 0% APR
Before you can ever start getting the max benefits out of your credit card, even those with all the "rewards," you need to get your balances down to $0. If your credit is good enough to get a 0% APR credit card with balance transfer options (at 0% interest and no balance transfer fees), then it would be a great help to you to make the application and get the card. Then transfer as much credit card debt to it as you can, and get rid of the old card.
If you cannot get one quite this good, then look around and see if you can get one with a lower rate of interest than what you have now, and hopefully with 0% APR on the introductory offer (for at least a year) for any balance transfers.
4. Make No New Purchases
Credit cards are great tools when they are used correctly. But think with me for a minute - is it really a great tool if you are paying to use it every month? And on top of that, you pay interest on how much you still owe - each month? With all that interest being paid - it is no longer a bargain, but is actually costing you far more than if you had purchased it at retail prices.
In order to get the most out of your credit cards, you need to have them under control. Determine to reduce that credit card debt by paying them off and adding no new debt to them. If you have existing debt on them, then every time you are tempted to make a new purchase, think about how long it will take you to pay if off, and how much extra you will pay in interest and other fees.
Martin Lukac represents http://www.RateEmpire.com, an Internet consumer banking marketplace. RateEmpire.com is a destination site of personal finance, investing, taxes and mortgage rates. RateEmpire.com provides mortgage guides and financial rates and information. RateEmpire.com also operates a financial portal #1 American Financial, found at http://www.1AmericanFinancial.com and San Diego loan portal http://www.LendingSanDiego.com