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A Few Tips To Help People Get The Most From Charge Cards

No amount of credit card reform is going to help if you don’t spend the time to make your charge card accounts benefit you. As with many things, charge cards can be wonderful if you are disciplined, but they can also backfire and create a huge financial hole for you to dig out of. (If the latter is more likely for you, may I suggest measures such as freezing your credit card account?) Here are six ideas for how to benefit from your charge card account.

1. Eliminate Annual Fees

You likely looked into this before you applied to your current card of choice, but is your charge card account 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. (See also: Charge Card Account Fees: Hidden and Otherwise)

2. 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 charge 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 consumers were fine before the invention of debt! If you can’t afford it, just don’t buy it. (See also: How Much Does Your Credit Card Account Debt Cost You)

3. Stick With Cash-Back Rewards

There are zillion different ways to redeem your credit card account 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.

4. 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.

5. 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 account. Now that the introductory 0% APR period is over, do you still need to keep it?

6. Use Charge Cards Whenever Possible

This is only for those who can pay off the balance of course, but remember to use your charge card account every chance you get! I know there are many consumers who like to make fun of those who use charge cards for the smallest purchases, but did you know that it is actually easier (and faster) for both the buyer AND the seller when small purchases are paid using a credit card? When you don’t even need to sign for a purchase at some of these stores, using a credit card account is a no-brainer.

There are many more ways you can save with a credit card account, but if your credit card isn’t working for you yet, start with the tips up above.

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