Credit cards can be used to your advantage, if you are disciplined and know how to manage them.
Where most people get into trouble with credit cards is not paying them off in full each month. Credit card companies bet on this and charge you exorbitant interest rates on overdue balances.
Don't Use Credit Cards if You Can't Pay The Balance In Full
My advice: if you aren’t able to pay off your entire balance in full each month - don’t use credit cards. Credit cards are not intended to be a long-term payment or large purchases option unless you can afford to repay them in full within the interest free period (ideally sooner). Note that some cards do now offer longer introductory or promotional interest free periods.
Credit Card Benefits
If you choose the right credit cards and manage them well you can receive benefits such as cash back, flight miles, hotel points, free insurance, no international transaction fees, points redeemable for products and services, other coupons and discounts. I recommending choosing the card most suitable for your lifestyle and the things you are already spending money on in order to optimise your discounts and benefits.
Don't forget that credit cards also offer you protection from fraud and faulty products. Most credit cards also come with purchase warranty benefits and some even include insurance if your purchase is stolen.
The Best Use of Credit Cards is For Your Fixed Monthly Bills
What credit cards are ideal for is your fixed monthly bills so you can take advantage of auto-pay discounts. Use a high percentage cash back credit card for all your monthly service bills like phone, internet, power, subscriptions, car payments, lease payments, insurance, etc to be automatically deducted from your credit card each month. Gas and other regular monthly expenses can also be included here. Then set up the credit cards to be automatically paid in full, from your bank account each month.
Pay Your Credit Cards Early To Increase Your Credit Score
Here is another trick for you: the credit agencies check your credit usage to determine your credit score 3-5 days before your payment due date each month. You can improve your credit score greatly by making sure to pay off your credit cards each month in full at least 5 days before the date they are due.
A better credit score enables you to get better interest rates when borrowing money. It can also potentially rate you higher for better premiums on your life insurance investment policies.
What To Do If You Already Have Credit Card Debt?
If you have already gotten yourself into trouble with credit cards, do not despair. See my previous article on using your personal bank life insurance policy to snowball your repayments. If you aren’t sure on how to do this yourself, one of the services I offer my clients is a program called Debt Free Life. Part of that program includes me working with you to create a debt repayment schedule and a long-term investment plan. It will improve your credit score and help you save for large future expenses such as college, investments, property down-payments or business start-ups and a financially secure retirement. You can even use the program to pay of all your debts including your mortgage in half the time or less without spending anything more. It's pretty amazing!
If you are interested in an obligation free discussion, you can schedule time with me here.
