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Having a credit card has a lot of perks, and only the most credit savvy among us have been able to make the most of their credit cards to their benefits in order to smartly and optimally save money even while charging on their cards. If you are responsible about how you use your credit cards, you can actually use the credit card benefits to your advantage, rather than if you just stuck to cash.

If you want to become a credit savvy, here are some actual ways you can get the most out of your credit cards.  

Use rewards cards only if you can pay in full

Rewards cards aren’t the same as regular credit cards since reward cards tend to have a bigger interest rate compared to the regular ones. For instance, it’s only worthwhile to earn exclusive rewards from a Visa credit card if you intend to pay off your balance in full each month without fail. If you cannot stick to your schedule, then you’re better off opting for a credit card with lower interest rates.

When you’re paying your balance, make sure to completely clear your card each month. If you don’t, you will be charged interest on everything on your card (unless it’s during a 0% introductory period) – not just the bit you have not paid yet.

Pay more than the minimum and avoid late payments

There’s always something good when you practice good payment habits. You can avoid excessive fees and charges put upon your account. It’s always best to pay your balance in full, but if you can’t do it, then your other option is to pay more than the minimum. This will save you quite a bit in interest rate over the long term. There are also some credit cards that will reward you for paying more than the minimum.

Consolidate your credit card debt with care

Usually, consumers try to trim their credit debts by transferring their balance to a new credit card, which offer a 0% or low APR, but for a limited introductory period. Make sure you research and do a cost benefit analysis before you consolidate your credit debt since most of the credit cards these days come with a balance transfer fee that you’ll have to pay when you make a switch.

You should also check if you can entirely pay off your debt before the 0% balance transfer period is up. This can also avoid any increases in the credit rate. If you can’t make this happen, you can find a new card which carries a much lower APR and balances it there.

Stay away from the minimum payment trap

You might think that paying your bills off in small amount is good, but just paying for a small amount can cost you a lot in the long run. You end up making repayment for years not realizing that you’re paying more in interest than the original debt.

The best thing you can do is avoid overspending on one card since you’ll only end up paying more. 

Don’t own too many cards

A credit card is not a collection. It’s best to avoid having too many rewards cards because if you do, you will not be able to maximize your rewards on any card. Having a lot of credit card to choose from will only result you to overspending.  

Don’t rely on credit cards to cover an emergency

People usually don’t have any emergency fund and instead, they end up relying on their collection of credit cards to get out of the situation whenever the need arises. Without savings, you’re only making your debt grow. If you are keeping a balance, you’re paying extra in interest. While you might think credit cards can help you get out of a financial situation, this will only be expensive in the long run.  

Talk to your card provider about lowering your rates

Having a good credit history can be your ticket lowering your rates. If you’ve been a customer for a long while now, you can discuss a possibility of lowering your rates.

Avoid cash advances

Your credit card is not a debit card where you can get your cash for free. When you make a cash advance, you pay for bigger rates that are higher than your interest rates.

Taking control of your credit card can be difficult, but by following these tips, you can learn to manage your finances easily. It just takes a fair amount of discipline.

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