How to Make Your Credit Card Work for You
Credit cards have always been perceived as the biggest contributors to consumer debt. But did you know that, with smart strategies, you can make your credit cards work in favor of debt management? Keep reading to find out how.
Debt Management Favors Credit Cards
Thanks to the slow economy, credit card companies are making brisk business. Credit card holders have the ability to buy things even if they have no savings in their bank accounts. Of course they must pay back the card companies eventually, but it’s the high interest rates that accumulate into debt for account holders. However, a proper debt management planner can provide strategies that make your credit card work in favor of you.
Debt Management Tips for How to Save on Credit Cards
Maintain a Healthy Credit Card Balance
Debt management counselors will advise you to prepare a detailed cash flow budget sheet. It will help you keep an eye on your credit account and is recommended to maintain a healthy balanced ratio that is compatible with your income.
Always Pay on Time
Make it a point to make your monthly payments on time. Paying on time saves you from accumulating even higher interest rates. Debt management analysts often suggest paying by direct money transfer instead of check.
Avoid Borrowing from Your Credit Card
It is not unusual to come across unexpected expenses in day-to-day life, but it is not a good idea to use credit cards to meet those expenses. Debt management planners instead suggest borrowing the money from another source, such as a savings or debit account if you have one.
Retain a Good Credit Rating
If you pay your bills on time and avoid late payments, you will have a good credit rating. And this credit rating often works in your favor. Debt management handlers use this rating as proof that you are consistent in your payments.
Debt Management Tricks to Earn Extra Money from Credit Cards
Although it may sound unbelievable, it’s true! Here are some hidden tricks for earning extra money from your credit cards:
- Buy large items with your credit card. Usually the card will cover the associated insurance and/or warranty charges.
- Choosing cash back credit cards will help you earn some money every time you purchase.
- Christmas or other festive seasons are good times to invest in credit cards as most companies offer free gifts, vouchers or holiday packages along with a new account.
- Use your credit card to get the most out of it. You can borrow money from a 0% interest rate card to pay off high interest rate cards. This is considered a good debt management strategy, even better than debt consolidation.
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