Get the Most From Your Credit Card

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Get the Most From Your Credit Card by Finance Globe

Credit cards can be a valuable money management tool if used properly. We have many choices in card features, perks, and rewards. Getting the most out of any credit card starts with choosing the one (or several) that best suits your needs.
Credit cards offer more than a convenient way to pay, and if you manage your credit card accounts well, you can be sure to get the most out of your credit card while paying less for those benefits. The extras your credit card offers will depend on the type of account you qualify for. Carefully consider all aspects of any card before you apply, and use your card in the way that will benefit you most once you get it.

Secured cards and credit cards for people with poor or limited credit are usually bare bones credit cards that don’t offer many, if any, benefits. They charge significantly higher interest rates than other credit cards and usually have a somewhat steep annual fee. The only real benefit they offer is that they can help you establish or improve your credit until you qualify for better terms. You have to actually use your card to improve your credit history; just having the account open without using it won’t improve your credit. The best way for you to build your credit is to use your card every month, use no more than 30% of your credit limit, and pay your bill in full every month to avoid finance charges. If you’ve had one of these types of credit cards for some time, you’ve stayed within your credit limit, and you’ve always paid your bill on time, contact your credit card issuer to see if or when you’ll qualify for a better card. They may agree to return your security deposit, reduce your interest rate, or do away with the annual fee. You may even qualify for a card with rewards. Your credit score can be hurt by closing old accounts and opening new ones, so see if you can upgrade the terms of your credit card while keeping the same account number.

Regular credit cards are for people with average to good credit. Regular credit cards often have a reasonable annual fee and fair rates. They don’t require a security deposit and usually have a higher credit limit than cards for people with poor credit. Some come with limited rewards, such as travel miles, points you can redeem for merchandise, or even cash back. Cards with no annual fee usually don’t offer as many rewards or charge a higher rate of interest than cards with an annual fee; if you want a low rate or rewards, you might have to pay an annual fee. Basically, you’re going to pay for the use of credit somewhere. You can reap the benefits and avoid the costs of a credit card by choosing one with rewards you can use and no annual fee. If you can pay your balance in full every month, it really won’t matter what the card’s APR is. Many regular cards, and even cards for people with poor credit are marketed as “platinum”, but really don’t offer many benefits to validate the platinum status. Find out if you’re really getting better treatment from the platinum card before you apply; you may get a better deal from a plain vanilla credit card.

Premium credit cards are for people with good to excellent credit. Credit card issuers want your business, and they will offer you their best terms because they know their competition is offering you their best deal, too. You have many choices in credit cards with no annual fee, great interest rates, and generous rewards. Many even offer extras like extended product warranties, roadside service, car rental insurance, and travel accident coverage at no charge. Some offer special discounts at selected merchants. You are likely to qualify for high credit limits because credit card issuers know they can trust you to manage your debt well. If you are interested in a credit card that’s available to people with average credit simply because it offers benefits that are important to you, check with the card issuer before you apply. They may be willing to sweeten the deal due to your stellar credit rating.

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January 27 2008 06:38 am | Credit Card

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