You probably have heard that you can get 1% cash back on all purchases using credit cards but you think that it’s not worth the risk of opening a credit card. However, if you are already spending $10,000 a year on debit cards that means you are missing out on 1% or $100. Who doesn’t want a free $100. That’s just with 1%, if you follow these steps below you could be making a consistent 15%-20% which comes out to $1,500 – $2,000. So, let’s learn how to take advantage of credit cards.
Here are the free steps that other websites want to sell to you, credit card companies don’t want you to know about, and the debt industry has been actively trying to hide from you:
1. Know the only thing bad about credit cards is if you don’t pay them off in full then they will accrue a lot of interest. So, the only limitation about credit cards is your own ability to not spend more than you have. There is nothing else bad about credit cards. In fact, they are mostly good.
2. Look at the next 12 months and see what you have planned. What you have planned will help you decide on what card to get. For example, if you decide to travel, get an airlines card, if you need cash, get cash back.
3. Look at the next three months and see if you have any big expenditures coming up. This is because most credit card bonuses need to be accrued within three months. If you have big car bills or medical bills take these into consideration because you can hit the bonus faster. Read Live In A Big City? Here Are 6 Things You Can Save Money On With A Phone Call for ideas of big reoccurring payments you can save and hit your bonus on.
4. Pick your credit card and apply for it. Check out The List for some of my personal favorites depending on what you are doing.
5. Wait. It can usually take up to a month or more to get approved and your card in the mail. So, make sure you ordered your card a month before you must make any of the big expenditures.
6. Get your new card and use it only for things you were already spending money on. The biggest trap that the credit card companies do is make you think that you have more money than you do. Read The Credit Card Backfire for more details about abusing credit cards.
7. Hit your bonus, pay off the card, get paid (usually take 4-6 weeks) and put that card in a designated credit card drawer so that you aren’t tempted to touch it and use it. Read How To Make Money Using Your Credit Score to learn more about using you credit card even more efficiently
8. If your card has an annual fee, when they charge you after a year, call them and ask to lower your status of your card to a non-annual payment card. They should reimburse your fee and you won’t have to deal with the card for a very long time.
9. Every 3-4 years the credit card company might send you a notice saying that if you don’t make a purchase in the next 30 days they will deactivate the account. So, make a purchase and pay it off and put the card back in the drawer. This is because you want to keep that credit history line open and keep your credit utilization down. Read how The Credit Bureaus Look At Your Credit Score to see “the why” of these steps.
10. Repeat. You will notice that when you open a line of credit your score will go down, but if you pay that new line of credit off every month for 1-3 months usually your credit score will return to normal or even go higher. So, if you keep your score decently above 700, you can keep opening credit cards and keep getting those bonuses indefinitely. Read Can You Take Me Higher? 5 Things to Increase My Credit Score Higher Than 700 to learn how to keep your score high.
11. Most credit cards will let you open the same card again after two year of canceling or downgrading the card. For wait 24 months and get the same perks again. Read Parents! Want to Learn How to Make Money Back While Paying For College because college is 4 years, that means you can do this at least twice during college.
That’s how you use credit cards. Visit
IndivEcon.com for more out of the box ideas on how to manage and optimize your
own finances.
