Using credit cards to your advantage

How to use credit cards to your advantage

Credit cards are often referred to as evil, unnecessary and a certain way to get into debt, but used to your advantage they can be a fantastic financial tool.  The most important thing to consider when applying for a credit card (and considering your credit limit) is, can you pay it off in full each month?  This is a MUST.


To make the most of your credit card, use it at every opportunity, and by that we don’t mean shopping sprees.  Use it for your everyday purchase, such as groceries, petrol, bills etc.  You will be surprised at how quickly your spending adds up, and if you are spending the money, you may as well be rewarded for it.  Once you have accumulated enough points from the rewards program, you can then convert your points into gift vouchers, you might be able to get a voucher to cover a week’s worth of shopping a few times a year.


The features to look out for when credit card hunting include:


They offer up to 55 days interest free – This is especially helpful if you are making a large purchase on your credit card (and you would of course already have the cash in the bank ready to pay it off).  It means you can keep your cash in the bank longer, earning interest that you wouldn’t have otherwise earned had you paid cash for your purchase.


They are often connected to rewards programs –meaning you can get rewarded just for making your everyday purchases.  Credit cards offering an attached rewards program often have higher interest rates than those without a reward program, however if you are paying of your credit card in full each month the interest rate won’t matter.  Even if your credit card only offers frequent flyer rewards, you can usually still turn these into gift cards for major retailers.


Choose a credit card with no annual fee, or a fee as low as you can possible find – Obviously it’s ideal if you find a credit card with no annual fee, but these can be hard to come by when you want additional features such as rewards programs.  A card with a low annual fee can work, just be sure that the annual fee is less than the benefits you will receive from the rewards program.





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