How to use your credit card to your advantage
Many of us use credit cards regularly but ask yourself the question, do you use them for the right reasons? You might have read many personal finance tips that state that you shouldn’t use credit cards, but you shouldn’t necessarily agree with them; credit cards should simply be used for the right reasons. Here we’ll detail a couple of examples of how you can get the most out of your credit cards.
You love shopping?
If you like shopping then you could be missing out on loads of savings by not using purchase credit cards. With a purchase credit card, providers normally offer a typical interest free period of 12 months, but because it’s there it doesn’t mean you should abuse it. Only use the interest free period for big purchases that you would like to pay-off over time. Purchase credit cards also offer great benefits in terms of points. If you regularly shop in the same places then you can fund your purchases on a rewards card and build up the points to use when you please.
Do you have your own business?
If you have your own business, you could reap the advantages of a business credit card. Business credit cards offer a whole load of benefits to company owners, not to mention allowing a business to easily monitor company expenditure. They also give business owners the option of flexible spending whilst helping to easily build their business credit rating. It’s important to remember that a business credit rating is completely separate to a personal credit rating. Business credit cards also offer a lot of rewards, from supplier discounts to discounts on travel.
You love traveling?
If you like traveling then you could consider an airline or travel credit card. They can offer you great opportunities to build air miles that you can use when you please. Many of the main credit card providers offer these cards but the type of rewards you can get can vary. Typically you can build maybe 1 or 2 air miles whenever you spend £1, but some other providers may offer big bonuses, for example 10,000 air miles if you spend £1000 on your credit card in the first six months.
Are you just starting out?
If you’re just starting out in the credit world, then give your finances a well needed boost with a credit builder credit card. These cards are brilliant, and they can help you show any lenders that you are reliable and that you can make regular repayments, hence boosting your personal credit rating.
Reward yourself for spending money using a rewards credit card. Rewards card differentiate from purchase credit cards as instead of just getting rewarded points that you can later redeem, rewards credit cards offer elements of cash back and exclusive deals that can help you save money. One example of a reward credit card could be 2% cash back on all purchases, but the rewards vary from provider to provider, make sure to check all options available to you.
The types of cards we have mentioned above are just a glimpse of how you can use credit cards to your advantage.