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6 Easy Ways to Get More Value From Your Credit Card

6 Easy Ways to Get More Value From Your Credit Card

Credit cards are a ubiquitous part of modern life. When they’re used correctly, credit cards can help advance your financial management. However, to experience the many benefits that credit spending has to offer, consumers must find the lowest interest rates and the best credit card for points programs.

How else can we get the most value possible out of our credit cards? We’re here to answer this question today, by sharing six easy ways you can make your credit cards work harder for you.

1. Understand Your Spending Habits

The first and arguably the most critical step to extracting more value from your credit card is gaining a deep understanding of your spending habits. This involves having a clear picture of where your money is being spent each month, and what barriers you may face with regards to ensuring your financial security

Are you frequently dining out? Do your dollars go towards travel, or are you spending more on groceries and utilities? By tracking and categorising your expenses, you can identify trends and patterns in your spending behaviour.

With this information at hand, you can then strategically choose a credit card that offers rewards and benefits for these specific categories. For instance, if you find that a significant portion of your income goes towards grocery shopping, a card that offers higher reward points or cash back on supermarket purchases would be ideal. Similarly, frequent travellers could benefit from cards that offer travel rewards or airline travel.

The key to maximising your credit card’s value lies in aligning it with your lifestyle and spending patterns. It’s not just about using the card, but using it intelligently and strategically. In other words, knowing where your money goes each month is a strategy to optimise the rewards you earn from your credit card.

2. Opt for Cards with Reward Programs

As  we briefly mentioned, many credit cards offer reward programs, where you earn points for every dollar you spend. These points can then be redeemed for various perks like travel, discounts on merchandise, or even cash-back offers. 

If you are looking to enjoy the perks that accompany credit cards alongside practising some healthy credit spending, then it’s imperative that you find a card with rewards you’ll actually use. Ensure to research and choose a card that has a rewards program that is aligned with your lifestyle and spending habits. That way, you can guarantee that you’ll be receiving optimal value for every dollar you spend with your credit account.

3. Pay Your Balance in Full Each Month

While it might seem convenient to just pay the minimum amount due, carrying a balance forward can lead to accruing interest charges. These charges can quickly negate any rewards or benefits you might have earned from your card usage, essentially making your efforts futile.

Interest rates on credit cards are typically quite high, leading to substantial charges over time. By paying off your balance in full every month, you effectively avoid these charges. This not only ensures that you fully reap the benefits and rewards offered by your card but also helps in maintaining a healthy credit score.

A good credit score is crucial for your financial health, influencing everything from loan approvals to interest rates. Regular, full payments indicate responsible credit behaviour, positively impacting your credit score. In contrast, carrying a balance and accruing interest signals credit risk, potentially lowering your score.

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4. Take Advantage of Sign-Up Bonuses

Credit card companies frequently use sign-up bonuses as a strategic tool to entice new customers. These bonuses can be incredibly lucrative, often translating into hundreds of dollars in rewards, points, or cash back.

However, while these bonuses can be tempting, it’s crucial to understand the associated terms and conditions. Sign-up bonuses often come with specific spending requirements within a certain timeframe. Failing to meet these requirements could mean forfeiting the bonus.

Moreover, some cards may charge an annual fee that could offset the value of the sign-up bonus. It’s important to calculate whether the benefits outweigh the costs in the long run. Also, consider the impact of potential interest charges if you carry a balance over multiple statements.

5. Use Your Card for Everyday Purchases

Using a credit card for everyday purchases is an excellent strategy to maximise your rewards, especially if your card offers points or cash back on these types of expenses. Items like groceries, petrol, dining out, and even utility bills can become opportunities to earn rewards.

For instance, if your card offers 2% cash back on supermarket purchases, using it regularly for your grocery shopping can lead to significant savings over time. Similarly, some cards offer reward points for fuel purchases, making them ideal for daily commutes or road trips.

However, while this approach can be beneficial, it’s important to manage it responsibly to avoid falling into debt. The key is to treat your credit card like a debit card. Spending what you can pay off quickly prevents you from accruing interest charges that could outweigh the benefits of the rewards earned.

Get More Value From Your Credit Card
Using a credit card for everyday purchases is an excellent strategy to maximise your rewards, especially if your card offers points or cash back on these types of expenses.

6. Don’t Ignore the Fine Print

One common charge is the annual fee, which is the yearly cost of having the card. Some cards waive this fee for the first year as part of their introductory offer, but it will apply in subsequent years. Depending on the size of the fee and the rewards offered, it may or may not be worth it.

Late payment fees are another cost that can quickly add up. If you miss your payment deadline, even by a day, you could be hit with a hefty late fee. Plus, your interest rate may increase, and your credit score could take a hit.

Foreign transaction fees are important to consider if you travel frequently or make purchases in foreign currencies. Some cards charge a percentage of the transaction amount every time you purchase outside of your home country.

Other possible charges include balance transfer fees, cash advance fees, and over-limit fees. Each of these can eat into your rewards or even lead to debt accumulation if not carefully managed.

Summary

All in all, getting the most value from your credit card for you and your family to enjoy requires careful consideration of your spending habits, diligent repayment of your balance, and an understanding of the rewards and potential fees associated with your card. With these strategies in mind, you can turn your everyday spending into valuable rewards.

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