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Used wisely however credit cards are a brilliant way to use someone else’s money. It’s not hard and here’s a few simple ways to do it :
1. Use the interest free period - pay back the full amount (yes the full amount on the day before the interest free period finishes (ie on 43rd or 54th day depending on what sort of interest free period you have) and you will not pay any interest at all!! Forget to pay it all off and you get charged interest for the full amount.
2. Find a credit card that has got a low interest rate - If you can’t pay the fill amount each month use a low interest credit card. There are a few on the market now days but you need to be very careful as some of them offer you are super low introductory rate for say 6 months to suck you in but after that the interest rate pretty much doubles.
3. Consolidate all your cards into one card (at the lower interest rate) and close down the rest. You do not need more than one card.
4. Say ‘No!’ to new credit card offers – next time you get a mailer from a credit card company offering you a new card or a letter from your own card company offering to increase your limit – tear it up straight away. The perfect recipe for disaster is to have too many credit cards all with big limits so steer well clear.
5. Think twice about rewards - they come at a cost – one credit card recently introduced an extra fee just for the rewards program. Always ask yourself whether you really need or will ever use the rewards.
6. All that glisters is not gold – don’t be swayed by the social aspect of having a gold card – they usually have much higher annual fees just for the privilege of perceived status. Just use the basic one. Remember there is no status in owing heaps of money!!
7. Reduce taking cash advances – you start paying interest on that money straight away. Try and avoid this at all costs.
8. Ask to lower the rate - many credit card companies will actually lower the rate is you ask. - Hey the worst they can say is no! Give it a go!
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