How to use Credit Cards correctly

Are you not sure what Credit Card to choose? Do you want to make money with your Credit Card? Did you know that you can improve your Credit Score quickly with Credit Cards?

Credit Cards can be extremely valuable if used correctly. Many of us have received our first Credit Card Offer in the Mail at about age 18. Credit Card Debt is still a big Problem in the United States.  If you need to remove Credit Card Debt from your Credit Report, contact the Three Credit Bureaus.

In this Article we will give you an overview of how to choose Credit Cards, what to look out for and what to do and what not to do.

How many Credit Cards should you get?

Lets keep it simple and start with 1 or 2 Cards. Because more Cards also mean additional work to Monitor them. As you get more comfortable with your Credit Card you certainly can apply for more. Just make sure that you do not apply for too many Cards at once. The Reason for that is because every time you do so your Credit Score will go down a few Points (Usually between 3 and 5 Points) it will also show a Hard Inquiry on your Credit Report which will stay on your Report for 2 Years. A hard Credit Inquiry is not necessarily bad, if shown on your Report, but it certainly does impact your Score.

Annual Fee?

We recommend that you do not apply for Credit Cards that have an Annual Credit Card Fee. And the Reason for that is because you have plenty of Cards to choose from that do not have an Annual Fee and it really doesn’t make any sense to Pay if you can get it for Free. Make sure that you look for the small print. Because some Cards offer “No Annual Fee for just the 1st Year” and then will charge you an Annual Fee.

Store Credit Card?

Store Cards sometimes have great offers but there is a big Problem with Store Cards because you are tied to that particular Store and can’t use it elsewhere! Which probably is fine if you have a Store that you use regularly, but we recommend not to get a Store Card.

Visa, MasterCard, American Express or Discover?

Honestly, it is best to have one of each but for starters we would suggest that you either get a Visa or a MasterCard, because those are just the most common and accepted pretty much anywhere.

Cash back or reward Points?

Cash back is probably the best way to go. Some Cards give reward Points that can be exchanged for Cash. Because it is important to realize that you can use the Cash either towards your Credit Card Balance or basically as a little savings account for when you want to treat yourself.

How to find the best Credit Card?

You can go to Google  and Type “Cash back Credit Cards” in the Search Bar or you can click here.
Further compare your options. Another key point is that quite a few Credit Cards have an Intro Bonus. Which means you get a one time cash back amount generally ranging from $50-$300 if you spend a certain amount of money within usually the first 3 Months. It is a great Bonus but should not be the main factor when choosing your Card.’

When to use Credit Cards?

Always, is our suggestion. What we mean by that is, try to use your Credit Card for everything that you would normally use your Debit Card for. For Example: Your Groceries, Gas, Rent and all other necessities.
IMPORTANT: Do not spend the Money that is dedicated for those Items for something else! Meaning, leave your Money on your Checking Account so that you can pay off your Credit Card.

As a result of using your Cash back Credit Card instead of your Debit Card you are earning between 1.5%-5% cash on every $ you spend.

Paying your Credit Card

Because you have not touched your Checking Account to purchase your Daily/Weekly necessities you should have enough money to pay off your Credit Card Balances. A good habit is to Check your Credit Card Account twice a Month. And Pay off the Balances as soon as it says “Minimum Payment Due” but do not just Pay the Minimum Payment! Pay off the whole Balance so that you do not carry a Balance into the next Month. That is Important to avoid any APR (Annual Percentage Rates) Fees. Also every on time Payment is shown as Positive on your Credit Score.

Every 6 to 12 Months

Every 6 to 12 Months you should contact your Credit Card Company and request a Credit Limit Increase. Most Credit Card Companies have that option online and all you need to do is log in to your Account and click on the request Credit Increase link and fill out the Form or you can just call your Credit Card Company.
A Credit Limit Increase will improve your Credit Score and it is a good feeling to know that you have a bigger Credit Line available even if you never use it to the fullest.

We hope you enjoyed our Article and as always we would love your Feedback!