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How To Make Credit Cards Work For You

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Image by Michal Jarmoluk from Pixabay

Like fine wine, your credit gets better with time. One of the best ways to build your credit is to become one of the billion card holders worldwide.

Even if you already have a card, that doesn’t mean you shouldn’t consider getting a new one.

Unlike fine wine, when it comes to credit cards, Business Insider suggests you should switch them every ten years to remain current.

Before you switch, you need to compare credit card offers. You also need to know your spending habits and lifestyle to help you find the most suitable card. This also allows you to avoid common mistakes such as:

  • Being unaware of your card’s APR
  • Having too many cards at once
  • Only paying the minimum amount due
  • Using more than 30% of the available credit

Comparing credit cards gives you the opportunity to make the cards work for you rather than you working for them. Here are three important tips for choosing the right card:

  1. Determine the card’s APR (Annual Percentage Rate).
    Cards have both an APR and an interest rate. Don’t fall into the trap of choosing the lowest interest rate. The APR includes additional fees. Knowing how much you plan to spend and how quick you plan to pay it off in advance will help you choose the right rate.
  2. Choose the rewards that fit your lifestyle.
    Are you one of the 2 billion international travelers reported by CNN? Do you put lots of miles on your car? Is shopping online your super power?
    Knowing the answers to these questions will help you choose a card that has the best rewards for you, such as:
  • points that go to specific merchants
  • gas credits
  • sign-up bonuses
  • travel credit

You can even stack your cards to get more rewards. If you do, don’t fall into one of the common credit card mistakes and get too many. Keep the number manageable and beneficial.

  1. Pay the balance due.
    Once you’ve chosen the right card, pay the right amount.
    Paying the entire balance doesn’t allow you to build credit as quickly. Paying the minimum due allows too much interest to add up.
    By paying the balance due regularly and on time you can have your credit card work for you. Keep your credit usage below the recommended 30% and enhance your financial profile.

Finding the best card is as easy as following these steps.

Determining your spending habits in advance will allow you to plan for paying the balance and figuring out which rewards are for you. Additionally, knowing the APR and interest rate will help you find a card that gives you enough time to pay it back.

After you know what it is you are looking for, compare cards and find the one that is right for you. Like fine wine, you will know you’re getting the best if you’ve done your research.

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