The “Ultimate 4″ credit card tips
posted in General |If you are into simplicity with you finances you may not be a fan of credit cards.
But if you have the discipline and access to some great tips like these, you can really make them work in your favour, and get them giving you bonusses for the same effort.
1. Pay off your balance
This is the classic tip. And the most important one. If you cannot do number one then forget about reading any further. Credit card tricks need discipline. If you do not have the discipline to pay off your entire balance every month you have no business trying work credit cards to your advantage. You will only end up with pain.
2. Work your cards to increase your credit rating
Now we are getting into the credit card tricks. A little known fact in financial circles is that one of the factors in your LIKELY hood of being approved for credit, that is your credit score (we are talking about gearing loans and margin loans here.. good debt you can use to accumulate wealth) has to do with the ratio of your outstanding balance to your credit limit.
Let us say for example you owe $2000 on 4 cards, each with a limit of $2000. That is $2000 you owe, on $8000 total limit. Which is 25%.
You may think.. I am spending too much with these 4 cards, I should move it all to 2, and cancel the other 2.
This means you have $2000 owing on a total limit of $4000. Which is 50%.
That actually counts against your credit score. You look more stretched. Rather than frugal.
Tip: Work your credit limit to your advantage. The higher the ratio of amount owing to total limit the better. So, this trick would suggest if you have 10 cards with $2000 limits, that helps you more than 2.
3. Loyalty Programs
Loyalty programs are money for jam. If you have the self-discipline you can literally get something for free.
But, beware, even just one month where you get penalised with late fees or increased interest, will go along way to completely offsetting any benefit you will gain over a whole year.
Classic examples of people working loyalty programs well are those that buy all their monthly groceries on credit, so an expense they would always have anyway, and gaining points from the purchases which they use for a free holiday flight.
4. Signing Bonuses
There are alot of marketing programs around aimed at selling credit cards. One that you can take advantage of in two ways is the cash bonus schemes.
Two advantages can be leveraged from this one.
First, obviously, is the cash reward. Again, something for nothing. Just do not blow it with late fees or having to pay interest on purchases.
Second, is that by getting approval for further credit, as mentioned in part 2, you actually increases your credit score.
