When it comes to credit cards, many Americans feel that they are just wasting money on them, and getting nothing in return. It’s true that, if you are not financially responsible, a credit card can quickly turn into a financial black hole that will suck in all your money, leaving you with absolutely nothing. But it doesn’t have to be that way. If you are smart and careful, you can turn things around and make your credit card work for you.
Here’s how you can do it:
Pay off your credit card debt
If you want to make your credit card work for you, you have to start by paying off your debt. All that interest is just big money being thrown away. So pay off all your debt and afterwards find a credit card with a lower long-term rate. That’s the first step in making your credit card work for you.
Use rewards card
You absolutely need to get a rewards card. Big mistake if you’re using one that offers rewards points for your purchases!
Rewards cards come with a lot of benefits. And if the card fits your style and you take full advantage of what it has to offer, then you will really see how it can help you save money. In fact, if you pay everything you owe on time and avoid interest charges, the credit card company will end up paying you to use their card.
Pay your balance with points
If your card comes with cash rewards, you can use those rewards points to pay your balance. This way, the rewards points are not only paying down the debt, but they are also reducing your interest burden. So don’t use them to purchase stuff, use them to get rid of debt instead.
You can save on car rental insurance
Most big credit cards also come with rental car insurance. This feature can save you a lot of money, but you still need to be careful, because there are limitations that you need to be aware of. So don’t decline any rental company insurance coverage until you have a complete understanding of your credit card company’s coverage.
Most people who buy electronics also like to buy extended warranties. But some credit cards can offer you the same coverage, free of charge. But, again, talk to you credit card company first to find out all the details.