When used responsibly, credit cards can offer consumers a number of advantages. For example, making purchases on credit cards can be a smart way to keep track of all of your expenses. Some cards even offer nice cash-back deals, which makes your money go just a bit further. Learning more about credit card tricks and tips could provide you with more benefits than you realized.
Monitoring Credit Cards
Many of us use credit cards because they are convenient, but cards can easily be lost or stolen. In some instances, you may still retain the card, but someone has stolen the vital information like the card number and pin. Therefore, it is up to you to monitor your cards and watch for any kind of suspicious activity.
- Check credit card statements for charges you didn’t make.
- Take advantage of your online credit card account to check for recent transactions, which appear to be suspicious. You should immediately report any unauthorized charges to your credit card company.
- Request a credit report from each of the main credit reporting bureaus. You are allowed one free report per year from each bureau. Look for new credit card accounts, mortgages or loans that you didn’t open. You can dispute new accounts you didn’t open and freeze your account with the credit bureau.
Using APR Promotions to Your Advantage
APR promotions offering 0% interest rates for balance transfers or new purchases can be a smart way to get rid of high interest debt from other cards. Just make sure the rate applies for at least six months, and double check the cost of transfer fees, which have been increasing to as much as 4 percent on some cards.
Charging at the Pumps
Although paying at the gas pump with a credit card may be convenient, it does increase your risk of having your credit card information stolen with skimmers mounted on the pumps. However, there are a few precautions you can take:
- Walk 20 feet and pay inside the store. It may take an extra two minutes to pay for your purchase, but it is better than dealing with credit card theft.
- Use gas pumps located closer to the store, which might not be equipped with credit card skimmers.
Securing Credit Cards
- Credit card companies and merchants are in the process of converting cards and terminals over to chip cards and readers, which help to prevent fraud.
- Placing a freeze on your account with the credit bureaus can prevent anyone from making an unauthorized credit inquiry, which can harm your credit score.
- Most card issuers have mobile alerts available, which can notify you if there is unusual activity on your account, you’re nearing the top of your limit or if the card has been used.
Carrying a Balance
About 30 percent of your credit score is based on a credit utilization score. The score compares the credit limit on the card to the amount of credit, which has been used. To avoid damaging your credit, you should consider setting a balance alert with your card issuer. Set the alert at 30 percent below your limit.
If you use your card frequently to make several purchases during the month, you might consider making your payment in the middle of the month to offset the charges, which could help to keep your utilization score lower.
High Interest Credit Cards
For some folks, it can be easy to mismanage their credit cards until their payments keep climbing. Take a look at your statement to see how much you are paying for interest each month; you may be very surprised. Consider a payment plan to reduce your debt before interest rates rise higher.
Making Credit Card Payments
Ideally, it is best to pay off your debt in full every month to avoid interest charges. However, if you need to make payments, make sure you aren’t late. Many card companies charge as much as $39 for late payments.
Reward Programs/Card Perks
If you are happy with your current card company and don’t wish to switch to another company, you should take a moment to explore your current credit cards. In all likelihood, you may have opened an account based on an introductory rate that attracted your attention. However, there is a good chance that your company also offers a number or rewards and perks like these:
- Cash-back on purchases like paying a utility bill or buying groceries.
- Frequent flyer miles.
- Hotel discounts.
- Gas card rewards that may offer a rebate ranging from 3 to 5 percent off the cost of your gasoline.
- Perks like travel insurance, extended warranties or price protection.
Choosing New Cards
If you are in the market for a new credit card, use the internet to research possibilities. In most instances, you can find out whether a company offers new introductory rates, what their current interest rates are and if they offer rewards. If you plan on carrying a balance, make sure you check the percentage used to determine the minimum payment amount. Remember, your credit rating could take a hit if you have too many credit cards open or you’re carrying too much debt.
To avoid damaging your rating, it may be advisable to pay off old high interest cards and close the account before applying for a new card with a better interest rate or one that offers more advantages.
Credit cards that may offer better interest rates, rewards or cash-back can offer advantages to consumers if managed carefully.