How to Take Advantage of Your Credit Card Benefits

Knowing Your Credit Card Benefits

       Using a credit card requires the ability to spend money intelligently, to avoid the risk of having a lot of debt, or paying extra dollars with interest. When you shop frugally and use your credit card wisely, you can take advantage of rewards, points, and save various perks, or even make money. And you can do it without debt as long as you follow two basic rules: only charge what you can afford, and pay off your balance in full each month.

Using credit cards irresponsibly can leave you burdened with lots of bills, even debt. How do you know the benefits of your credit card?

There are many benefits of credit cards if you are disciplined with your spending, pay off your card balance in full each month, and know how credit cards work.

If you are not disciplined and think a credit card is too tempting, you better stop.

Credit cards can get you into financial trouble, especially if you are an impulsive shopper. And of course, if you already owe a credit card, repayment should be your top priority.

Using a credit card and paying on time will boost your credit score. A proper credit rating means that you can get loans and credit cards soon in the future. This is one of the advantages of a credit card that cash or check cannot offer.

How to Use Your Credit Card Benefits

Eliminate Yearly Fees

You've probably seen this before applying for your current credit card of choice, but are your credit cards still free to have? Many companies are starting to charge an annual fee, and chances are yours will also charge an annual fee. These are companies that tend to include an annual fee as one of your monthly bills, and may not be notified, so double check to be sure.

Pay Your Balance Every Month

Don't use credit cards until you can pay them off each month. Do you understand? Now read again, and follow the rules.

If you don't believe it's possible to live without borrowing, remember that many people were great before the invention of debt. So, if you can't afford it, it's better not to buy it.

Extended warranty benefit

You decide to purchase a luxury electronics warranty extension, but spending more money is not a good option. If you use the right credit card, you can technically get a warranty extension and save money. Check your savings card before you deposit, to see if any of your cards have long-term warranty insurance, and what you need to do to get a profit. Keep your purchase receipt for the duration of the warranty period, so you can easily make a return if the product fails.

Registration Bonus

Some credit cards offer attractive bonuses that benefit you for signing up with them, such as a large number of bonus points, free flights, low or no fees, and other long-term perks such as promotions and interest rate reductions.

However, not all credit cards with sign-up bonuses are worth it, so you should check the terms and conditions before signing up. Chances are, there will be certain requirements you'll have to meet, like a minimum spend in the first few months. If these requirements match your spending habits, then a credit card with a sign-up bonus could be a plus.

Transfer balances to lower your interest rates

If you currently have a balance on a high-interest credit card, you can save a lot of money by transferring your balance to a low-interest credit card. Taking advantage of APR's no-percentage balance transfer offer will save you extra money, as you can avoid paying interest for up to 21 months by relying on your credit card of choice. For example, you could save about $400 by transferring a 17% balance of $3,000 to a credit card at 0% APR for 12 months, if you can pay $251 each month.

Stick With Cash-Back Prizes

There are a million different ways to redeem credit card rewards, but maybe it's best to stick with cash and you should use it anyway. For example, getting a free plane ticket is fine if you buy the exact same ticket for the exact same price, but get a $50 gift card and end up buying worthless $73 worth of useless junk.

Invest Your Money Back

You can value money because it works for you, and cash - even if your earnings are less than a few hundred dollars. Thanks to the power of compound interest, your cashback rewards will increase with time.

Let's say you earn $300 cash annually. If you make $300 to an account that earns 7% annually, 10 years it will grow to over $4,000

As an added credit card benefit, some credit card rewards include allowing cardholders to link their cards to eligible investment accounts. For example: When you take out a Fidelity Rewards Visa Signature credit card: You can earn unlimited 2% cash, and these rewards are automatically deposited into eligible Fidelity accounts, such as brokerage accounts, 529 college savings plans, retirement accounts, and much more.

To maximize your return on investment, look for credit cards without restricting categories. The more limits, the less chance to earn money and invest your rewards.

Choose a credit card with greater facilities.

Even if you are not interested in credit card rewards, you can still take advantage of the advantages of credit cards. For example, some great credit cards out there provide perks such as free travel insurance, primary and secondary rental car coverage, expense protection, and extended warranties. If you pay for your card in full every month, you can enjoy all of these facilities for free.

Cash back

Unlike Rewards cards, which give you points for spending cash on certain things, cashback cards pay money back into your account. These cards will save you money completely based on your monthly expenses, and the amount you will get back will depend on the credit card cashback rate. The right card will yield between 1% and 5% returns on your purchases. Depending on where you shop, certain places may even charge up to 10% higher on certain purchases during the bonus period.

Know all Benefits of Your Credit Card

It's always a good idea to find out what benefits your credit card offers. In addition to reward points, some credit cards take you to an airport lounge, while others will double your product warranty. By understanding all the benefits, you won't be overpaying for something you can get for free. For example, one of my credit cards offers rental car insurance.

Track and exchange your reward points

There are many rewards credit card companies give to users. Some cards provide gift vouchers such as free entry to airport lounges, some provide substantial reductions on electronic gadget spending, and others provide reward points which can be redeemed for discounts.

As a credit card user, you need to know how and when to redeem points to get the maximum benefit. Many people fail to utilize their reward points and allow their reward points to expire, which is a missed opportunity to maximize credit card benefits.

Write down why You Signed up for Cards in the First Place.

A good way to remember all these advantages is to actually write them down in a simplified form somewhere, so that you can look at them every now and then to refresh your memory. I understand this is a bit difficult, but I applied for one of my cards 8 years ago. Would you mind remembering all the details from 8 years ago? Or let's say you apply for a credit card balance transfer 0%. Now that the 0% APR introduction period has ended, do you still need to maintain it?

Take Advantage of all the Prizes You can Get.

The people who benefit the most from credit cards are those who have mastered the art of credit card appreciation. Many credit cards provide a variety of benefits, including cash-back, hotel loyalty points, and general flyer miles — which can be earned simply by using your card for normal expenses, like groceries or cable bills.

Credit card rewards become much less lucrative when you pay interest on your purchases, because you carry a balance. To avoid that mistake, seek credit card rewards if you understand the fact that you can pay your balance in full. If you're not sure, this gift might not be worth it.

Travel insurance free

Most credit cards come with a number of consumer protections, including car rental insurance, purchase protection insurance, supplementary coverage insurance, and even travel insurance. According to Canstar data, cards with travel insurance make them one of the most sought-after features.

Frequent Flyer Miles

If you travel a lot, and spend a lot of time in airport lounges, then the Frequent Flyer credit card might be the right choice for you.

This card is similar to a gift card in that you can earn points by making purchases, but it is created with the intention of spending those points on flights, lounges and other services. You can also redeem your points to upgrade your economy seat to business class or first class.

However, if you want to redeem points for things like gift cards and everyday items, then the Frequent Flyer card may not be for you, as the prices for these purchases tend to be relatively low.

Build up your credit score

Having a credit card can help you build your credit record and credit rating – if you make sure that you pay off your balance in full each month, and keep your spending low. The right credit score will make it easier and you won't have to bother applying for various types of loans later on, such as car loans or home loans, so making a habit of paying by credit card on time can be the right way to build a good credit score. (nerdwallet.com)

Make sure you use your credit card wisely, so the fees added to your credit rating are positive. If you omit some minimum monthly payments, it will be a serious black mark on your credit history.

Credit cards can be a convenient and safe option without using cash, or debit, to make purchases. The advantages of a credit card are too big for you to ignore.

Summary

A credit card is suitable for those of you who are disciplined and remain aware of your need to pay off credit cards before interest is charged, while maximizing profits. If you can afford to use your credit card responsibly, then shifting as many purchases as possible to the right credit card might be a wise idea. Then the advantages described above will easily add up and put you ahead, where you would be, if you were just using money and EFTPOS.