We all know that credit card companies have a variety of sometimes predatory tactics that are designed to lure you into credit card debt hell, and then keep you there. However, you can fight back, if you use your credit cards the right way. Indeed, if you know what you’re about, you can get maximum benefit from your credit cards. But it requires discipline and the willingness to pay your balance regularly.
Rewards credit cards
Rewards credit cards can be great additions to your credit card arsenal. The key, however, is to make sure that your spending (and interest charges) don’t negate the positive benefits of your rewards credit cards. I keep my spending in check by using my rewards credit cards only for specific things. My miles card is used solely for grocery store purchases. I get miles every time I use my card. And I pay it off every month. My Upromise college savings card (to help my son in some meager way) is only used for online purchases. Again, paid off every month. The idea is to find a credit card that has a rewards program that you can use, and that works for you.
Watch out for double cycle billing
Chase recently announced that it will no longer do double cycle billing. This is a technique in which your credit card, with some fancy accounting stuff added in, can actually be charged more interest. Imagine my surprise once when I saw that a balance I had paid off still yielded an interest charge because the payment didn’t go through until a specific time. Needless to say, I no longer carry a Chase credit card. You want to watch your credit cards for this, and avoid it if you can in order to keep your credit cards working for you.
0% APR balance transfers
These can be prodigiously helpful if you are looking to get out of debt and start anew with the credit cards. But be careful! Create a plan that will allow you to get rid of the transferred balance before the 0% APR rate for balance transfers runs out. Then, make sure that you don’t rack up new debt on your newly-cleared credit cards.
If you play your credit cards right, you can reap the advantages of rewards credit cards, good interest rates and other advantages, without actually having to pay for the privilege.