Don’t make the mistake of choosing a credit card simply because it can provide you with several rewards. Not all rewards are worth you time or money.
A frequent flyer’s rewards credit card will not benefit you if you are not, well, frequently flying or traveling. But, if you do travel a lot and use those rewards, this credit card can give you discounts on flights, points that can be redeemed for free flights and more. This is converted over into the power of savings, especially with the prices of airline tickets these days. Be sure to read the fine print, sit down and do your calculations to further ensure you are actually saving more money than you are spending.
The convenience of credit cards can be your best friend or worst nightmare. Do not neglect your responsibilities. One of which is to keep track of all your expenses. This is how you identify what purchases weren’t necessary, which will help you stop a bad spending habit right in it’s tracks.
I cannot stress this enough, don’t hold onto balances on your credit cards for too long. Even if you spent $1,000 and your minimum monthly payments are only $20 a month. This will devastate you in the long run. Try to pay those balances down as soon as possible. If you are trying to build better credit, 6 months of on time payments is optimal.
Paying your minimum balance will trigger further debts. Interest rates only apply when you have balances that carry over into the next pay cycle. Not to mention, interest rates are an additional expense by themselves. Look at mortgages, auto loans and students loans. You’re paying way more than the actual value of the acquisition. If you make you payments on time, ahead of time or immediately, you will be hit with less interest, if any, so you will get more savings.