4 tips to make the most of your credit card
We all know someone who is a real master at using his credit card: he goes on a trip, shops or eats in restaurants while we ask ourselves, how does he do it?
Well, in this blog we tell you how.
The first thing you need to know is that the key to getting the juice out of your credit card is to always pay your card on time.
As you well know, “plastic money” is not extra money and therefore before using it you must manage your budget well. And “card masters” are also masters at managing their personal finances.
(If it helps, we invite you to download this form to plan your monthly expenses.)
With the simple habit of always paying your bill on time, you transform your plastic into a great ally to improve your consumer experience.
The ultimate goal, beyond effectively paying less for various experiences and products, is to extract all the value offered by your card. That’s what this article is all about.
Read on to learn these tips to make the most of your credit card.
- Take advantage of discounts at partner merchants
All credit cards have a network of associated stores that offer discounts and promotions for using them in their premises.
Generally there are specific promotions depending on the day of the week, such as discounts on perfumes or 2×1 in shoes for children for example.
The most common categories are entertainment, restaurants, travel and fashion.
Each bank operates with a more or less exclusive network of associated businesses. This information is usually available on the bank’s website. Some others have an app to view credit card discounts and promotions. Also make sure to check out NovaCredit.com who provide the best tips when it comes to credit cards
In this sense having two credit cards can be beneficial.
First, because you will be expanding the network of associated businesses that you can access.
Second, because some cards offer greater discounts than others. Therefore, you can pay with the most beneficial or choose which items to pay with which card.
- Always use three interest-free installments
The Defined recommends this principle with one of the golden rules of the use of credit cards.
The grace is that it gives us time to pay for things we can’t buy in one payment.
However, this varies from bank to bank and some offer up to six months without interest. Many merchants in any case are adhered to give you 3 installments without interest without having to have the promotion of the bank in force, take advantage of them.
The Defined one recommends reviewing the Annual Equivalent Charge (CAE) and the Total Equivalent Cost (CTC), to have a clear idea of the total amount you will pay for your purchases.
- Use the points on your card
We all know someone who is a real expert at accumulating points with their credit card.
And they’re right, because the funny thing is that points allow you to pay from experiences – like travel or hotels – to all kinds of items, make gifts or get cashback.
Your points are freely available, so you can do whatever you want with them, even make donations.
This is the way your bank rewards you and encourages you to make use of the card.
The first thing is to know the rewards program of your card, because each bank has its own scheme to differentiate itself from the competition.
The key is to use your card constantly to accumulate points.
A good way to do this – which requires A LOT of discipline and responsibility – is to pay for EVERYTHING, from a candy to your department’s dividend, with your credit card.
The higher the amount, the more points you accumulate. At the end of the month, you pay ALL the statement from your checking account.
- Cashback or cash back
A cashback program is an incentive offered by credit card operators.
Under this type of program a percentage of the card’s net expense (purchases minus rebates) is returned to the cardholder as an annual, monthly, or campaign rebate in the form of a credit card credit reflected in their balance.
Products such as cashback are more beneficial to consumers who pay their entire bill each month.
BONUS: Combine your card with a term deposit
This is an advanced technique that, again, requires a lot of discipline to produce profits.
Above we recommend you to pay all your expenses with your credit card.
Why not put to work your salary deposited in your checking account in the meantime?
The way to do this is to put your paycheck into a renewable time deposit while you use your card, and make money orders once a month to pay off your balance.
Short-term deposits range from 7 to 90 days. If you have money to cover 60 days, so much the better. Leave an amount in your emergency checking account and deposit the rest over time.
As long as your money is deposited it will generate interest, so you can keep the difference once you make the money order to pay your statement.
Before we finish, we can’t help but reiterate that being disciplined – always paying your card before the expiration date – is mandatory for these tips to work for you.
Many of us associate credit cards with debt, but if you use it well you can get a higher value than what you pay using it.
With responsibility and consistency, you can also be an expert in the use of your credit card.