Credit cards are usually associated with being bad for your finances. But the reality is that if you’re managing your cards and being smart with your spending, credit cards can actually be a great financial tool. They can help you boost your credit score and even earn money for things that you’re already spending on every day.
Keep reading to learn a few smart tips that will help you make the most of your credit cards and start improving your finances today.
Learn Smart Strategies to Boost Your Credit
If you spend more than you can pay each month, miss payments and keep applying for new credit cards, you might see your credit score drop. But did you know that you can also use credit cards to boost your credit score?
There are several ways you can use your card to start building credit or to improve a bad score. Start by always paying your bill on time, and pay them in full whenever you can. If you’ve struggled not to overspend in the past, it might be a good idea to think of your card like a debit card. This means that you only spend as much as you know you have in your bank account at that time.
If you do need to carry a balance, try to keep it at or below 30 percent of your total credit line for all of your cards.
If you have several credit cards that you don’t use, resist the urge to close those accounts. Keeping your accounts open will raise the total credit line you have available, which also lowers your credit utilization rate. The length of time you’ve had accounts will also help boost your score.
Get a Low-Interest Rate When You Need to Make a Big Purchase
Not all credit cards have high-interest rates.
If you know that you’re going to need to make a big purchase that you don’t have the cash for, the right credit card might be a good way to make that purchase without a loan. You’ll want to look for a credit card with a low-interest rate.
Another great way to use a low-interest card to get ahead on your finances is to transfer your balance from another card. For instance, if you ran up a balance on a credit card with a higher interest rate, you could transfer your balance to your new, lower-interest card. This will help you pay it off faster, and without paying as much interest.
Make the Most of Your Points
One big perk of credit cards is rewards points. These points, earned for purchases that you’re already making, can help you get ahead on your finances without even changing your current spending habits.
Each reward card is unique. It’s best to think ahead about how you would like to use your points. For example, if you love to travel, a card with travel rewards that you can use for flights or hotels is a great choice. But you can also use rewards points to buy gift cards or even to pay off some of your balance. If you use your cards regularly and pay off your balance, these rewards are a great bonus that can help make your next trip more affordable or maybe give you gift cards that you can use to finish your Christmas shopping.
Earn Cash on Everyday Purchases
Credit card reward points are great for helping you save on a trip or for earning gift cards. But another option is choosing a credit card with a cash back option.
Much like rewards points, cashback cards help you earn cash on purchases you already make. The cash is real, and you can use it however you choose. Start a savings account, pay for groceries or put it towards that downpayment that you’re saving for.
USAA offers a variety of both cashback and rewards cards so that you can choose how you earn on your new card.
Get Ahead on Your Finances Today With the Help of the Right Credit Card
If you’re smart with your spending and choose the right card, credit cards can be a great tool for getting ahead on your finances. From rewards points and cash back to the chance to get a low-interest rate for a big purchase, and tools for building your credit, these tips can help you learn to use credit cards the smart way and start improving your finances today.