How to Make a Credit Card Work for Me
Junk mail. We all get it. Those credit card applications offering you great rates and something free. We get so many we can wallpaper our homes with them, but are we missing something when we trash them? Credit cards can get people into trouble if they get in over their heads, but when used correctly, credit cards can be very beneficial. Here are just a few tips on how to make a credit card work for you:
- Find a card with a great rate. Some offer a low introductory rate for six to twelve months or even a 0% introductory rate. If you need to make a large purchase or are paying a high rate on another card, this is a great way to save some money. Make a point of paying off the balance before the introductory rate is over.
- Pay your credit card balance off monthly. Use your credit card for your daily purchases and pay them off each month. Do not look at a credit card as a free pass to spend; you will have to pay it back plus interest.
- Find the credit card that best fits your needs. A lot of credit cards now offer rewards for using them. They may offer cash back on all purchases and an incentive rate for special purchases such as gas or travel expenses. This is an easy way to earn some cash on purchases you are already making.
- Shop safely. Credit cards are backed with the protection of federal law. The Federal Fair Credit Billing Act gives a consumer the right to dispute a charge if the purchase they made is not delivered as promised. This would include: if it is not the item they ordered; if it is damaged or not received; if was not delivered on time. This gives you better piece of mind when making a purchase with a credit card compared to using cash or a debit card.
Let’s look at the example below of how a credit card can work for you. This is a simple example of a credit card that gives 1% cash back for all purchases, 3% on gas, and 2% on supermarket purchases.
Wow, look at that! You have earned $246 on everyday expenses that you would pay for anyway. And now you’ll have some extra spending money to use on holiday presents at the end of the year or to treat yourself to something special! When credit cards are used correctly, they work for us, not against us!
Lincoln Savings Bank, Member FDIC.
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