Have you heard stories of people who wracked up financial debt or have bad credit?
Many of you have either experienced this firsthand or known someone who has fallen victim to it. This is simply a bad cycle that can be stopped.
Having a credit card is a big responsibility. Utilizing it in the wrong way can lead to negative consequences, while on the other hand, using it in the right way can lead to many positive rewards and benefits.
Whether you’ve had a line of credit for quite some time, or you’ve just secured your first card, it is important to know how to use it in a responsible fashion.
If you use your credit card in a smart and responsible way, you can reap the many benefits that come along with it. This year, you can greatly benefit from these 3 ways to use your card.
#1: Utilize Your Card to Build Your Credit
Building good credit is the number one reason most people choose to have a credit card. Credit can be impacted by a variety of things. In order to accomplish building good credit, it is important to do the following:
Pay Your Card Balance on Time
Paying your card on time is one of the most important aspects of having a credit line open.
Whether you pay toward your balance on the due date of each month, or you pay your balance off completely, this can boost your credit over time.
Check Your Card Statement
It is important to regularly check your card’s statement.
A statement is a list of what you currently owe and where you’ve used your card.
For example, a statement would show your recent purchase at the grocery store.
However, if you check your statement and notice anything out of the ordinary or see a transaction for something you did not purchase, you can report it to your credit card company.
If you did not check your card statement, and something fell through the cracks, your credit could be negatively impacted.
Set a Sensible Credit Limit
Having a sensible credit limit that you know you can afford to repay is extremely important.
If you have a credit limit that is way above your financial capabilities, it becomes easier to get bogged down by unnecessary debt.
Choose a sensible credit line so that you’re able to pay it off on time each month.
#2: Cover Your Short-Term Expenses
Everyone has short-term expenses. Maybe you’re paying for your weekly fill up on gas, a trip to the grocery store, or your takeout on the way home.
By using your credit card in these instances, you can then pay them off monthly. Most people use their debit card to pay for their short-term expenses, however, using your credit card this way can help you in the long-run.
By doing this, you can ensure that you aren’t tempted to use your card to pay for a luxurious vacation or an unnecessary shopping spree.
It keeps you accountable and shows that you’ll be able to pay your bill on time each month.
#3: Get Rewards With Your Card
Using a credit card can come with many rewards that many people are often unaware of. Often, companies that provide cards have certain perks that they offer to their customers. Depending on the specific terms and conditions of your card, some companies provide benefits such as:
Extended Warranties
Some companies offer extended warranties on purchases you’ve made with your card.
Guaranteed Returns
If a store does not allow for returns, but you’ve never worn or used an item you’ve purchased, some companies will refund you the money you’ve spent.
Special Access to Airport Services
Need a quiet area to relax in the airport? Some cards allow you access to special frequent flyer lounges in the airport.
Disputing Purchases
Did you know that some credit companies will call and dispute purchases on your behalf? This can save you time and remove the hassle.
Roadside Assistance
Some card issuers will offer their customers help in accessing roadside assistance such as a tow truck. Sometimes these services are free of charge. It all depends on your card’s benefits.
Travel Protection
Travel protection? That’s right! Companies may offer their customers travel protection such as over-the-phone translation, help in finding local hospitals, assisting in lost luggage, and much more.
Replacing Stolen and Damaged Items
If purchased within the last 90 days, some credit card companies will replace stolen or damaged items.
They will typically not replace anything that is perishable. However, this can be particularly helpful in other situations where your car or home have been broken into.
With so many benefits and perks, make sure to check out your credit card terms and conditions to see what special rewards you may have access to.
Are You Ready to Use Your Credit Card The Right Way?
There are so many ways to use your card in the right way. Whether you want to build your credit, cover your short-term expenses, or get special perks, the possibilities of positive benefits are endless.
By paying your credit card balance on time, checking your statement balance regularly, and setting a sensible credit limit, you can easily boost your credit score over the next year.
On top of that, changing the way you use your card can also be beneficial. Rather than spending on vacation, spend it on getting gas every week. Save money while keeping yourself accountable and out of debt.
Always make sure to check out your specific card’s terms and conditions. Credit companies often offer special perks and benefits that most people are unaware of.
You never know what special perks and benefits your credit company may offer, like extended warranties, special access to airport services, purchase disputes, roadside assistance, travel protection, replacing of stolen or damaged items, and more. For example, American Express Cobalt Cardmembers receive regular perks, bonus rewards and access to great events. Past Cobalt Perks include:
– Earning extra Membership Rewards® points for spending on Cobalt
– Getting statement credits for using your Card with your favorite brands
– Early access to blockbuster movies, and tickets to VIP concert experiences
Are you ready to start implementing these responsible, savvy ways to utilize your credit card? Use LendingArch to find the right credit card for you and get started building positive credit habits today!
