Most people agree that using a credit card to pay for day-to-day purchases is a smart idea. After all, credit is safe, convenient and rewarding. Plus, if you’re responsible, you’ll also be building a solid credit score with every swipe.
But are you really making the most of your plastic experience? Here are 7 credit card tips everyone should know:
1. Balance alerts can help you keep your spending in check
Keeping a watch on how much you’re spending with your credit card is easier than ever before. Most issuers allow you to set up balance alerts so that you’ll receive a text and/or an email whenever your total spending hits a certain threshold that you’ve set.
Sign up for this service so that you’ll get a notice when your credit utilization ratio is approaching the 30% mark – this way, you’ll know to make a payment before you jeopardize your credit score.
2. Spending analysis tools make sticking to your budget a cinch
One of the most underrated online banking features offered by most credit card issuers these days is the spending analysis tool. This allows you to see a breakdown of how much you’re spending with your card in different categories (restaurants, travel, general merchandise, etc.). You can usually choose to view this on a per-month basis or take a look at your spending patterns over time.
Be sure to look around for this tool the next time you log into your card’s online banking platform. It can provide some helpful insights into where you’re doing a good job sticking to your budget, and where you might need to cut back.
3. Mid-cycle payments could improve your credit score
Every month, your credit card issuer sends a report about your account to the three major credit bureaus. Included on this report is your balance, which is used to calculate your credit utilization ratio.
However, this data isn’t necessarily sent over after you’ve made your monthly payment – it could be reported at any point in your billing cycle. If you tend to charge a lot to your card each month, getting into the habit of making a payment mid-cycle will keep your credit utilization ratio low. This, in turn, will help 30% of your credit score determined by amounts owed.
4. Shopping through rewards malls will earn you stellar rewards
If you’re a big online shopper, you should definitely use your credit card’s rewards mall every time you place an order. This is an easy and convenient way to earn tons of extra rewards on every dollar you spend. And don’t assume that your particular issuer doesn’t offer this benefit. Even if it’s not widely advertised, look around a little the next time you visit your credit card’s website. You’ll probably find some type of rewards mall or portal that you never noticed before.
5. Moving your due date could help you avoid missing a payment
Missing a credit card payment is bad news for your FICO credit score, since 35% of it is determined by your history with making on-time bill payments. If your credit card billing due date comes at an inconvenient time during the month, consider switching it. You can usually do this online or by placing a call to your issuer. This one simple move could go far toward preserving your good credit.
6. Strategic swiping is the best way to maximize rewards earning
Using just one high-rewards card for all your spending is a good way to rack up a lot of points. But getting a couple of cards that earn big in the merchant categories you spend the most in and then using them strategically is a great way to pump up the volume on the rewards you’re accumulating.
For example, if you spend a lot on gas, dining and travel, getting both the Chase Freedom® and the Chase Sapphire Preferred® Card is a smart idea. You can use the Chase Freedom® at gas stations when they’re featured as a 5% category and the Chase Sapphire Preferred® Card when you travel and dine out. Then, transfer all the points you racked up on gas spending with the Chase Freedom® into your Chase Sapphire Preferred® Card account and bingo – you’ve got a boatload of points to use toward your next vacation.
7. APR promotions could save you big bucks on interest
If you’ve gotten into some credit card debt or need to make a big purchase that you don’t have the cash to cover, capitalizing on a credit card APR promotion could be just the ticket. By picking a card that’s offering a long 0% rate on purchases or balance transfers, you can dodge the sky-high finance charges that would come with using your usual card.