6 smart tips to make credit cards work for you

6 smart tips to make credit cards work for you
May 2, 2018

A report late last year by Canstar, New Zealanders are racking up credit card debt with 35% of people not being able to pay off their credit card in full each month. But you don't need to be a financial genius to make credit cards work in your favour, follow these six smart tips on how you can use credit cards to your advantage.

1. Reward points or cash backs

Many card rewards work on point systems where you earn a dedicated number of points for each dollar amount spent, while others offer cash back to a percentage value of the total spend. Reward benefits are almost endless, and the key is to find a card that best fits your individual spending patterns

2. Bonuses on signing up

Banks want you to have their credit card so many of them offer bonuses for signing up. The opportunity to earn air points or reward points for essentially doing nothing is very appealing

3. Building a credit history

If you've never had a student loan, mortgage or any other debt, you may have a limited credit history. Using a credit card and paying the balance off every month can help you build a good credit history and prove you can be disciplined. These are two great traits for when you want your first mortgage!

4. The interest-free period

A lot of credit cards offer interest-free periods on all purchases (up to 55 or 60 days). This gives you a period of time in your billing cycle when you can make purchases without being charged interest. Have your funds sitting in an interest-bearing account for the period before your credit card payment is due and make some easy money

5. Avoid Fraud

Paying with a credit card makes it easier to avoid losses from fraud. Use of an EFTPOS or debit card means that funds leave your account instantly. If you pay by credit card, you haven't lost any cash because of the delay before a credit card company makes payment to the provider of goods or services. So, if you're the victim of fraud, all that needs to be done is to notify your credit card company of the fraud and tell them not to pay for the transactions you didn't make.

6. Other benefits at no cost

My credit card provides free travel insurance, emergency travel assistance and extended warranty cover all at no cost.

Remember to be disciplined and make sure you pay off your credit card debt every month and make your credit card work for you! For smarter financial advice get in touch with me, Mike - right here.