6 Smart Ways to Use Credit Cards

Learn how to use your cards wisely and spend less in the end.

The first thing to know about your credit cards is whether you have the right one for you. That is, do you have the lowest interest rate you can get?

How to Get the Right Card

Credit card companies constantly offer promotions with low interest rates -- some as low as 0.0% interest. If you get an offer for a rate lower than the one you currently have, consider switching or calling your company to tell them you're got a better offer. Often, they'll match it to keep you as a customer.

Some card jugglers switch their balance from card to card and always pay the low rate. Just be careful to note when the promotional period ends because the rates go sky-high and you need to be prepared.

In addition, always look for cards that offer perks such as cash back for every purchase, discounts for going to certain restaurants, frequent-flier miles, Internet access -- anything extra that you get just for using your card.

To spend wisely with the cards you have, use these smart tips:

  1. If your card charges an annual fee, ask that it be removed. Many cards don't charge a fee, so you can always switch to one of these cards (be sure to tell this to the customer service representative when you call). Most credit cards will remove the fee if you simply ask. The only ones that absolutely won't are cards with which you earn airline mileage.
  2. If you accidentally make a late payment, call and ask whether the late fee and interest can be removed. Most cards will do this at least one time if you ask.
  3. If you constantly make late payments because the bill is due before your paycheck arrives, ask your credit card company if your billing date can be moved. Oftentimes they will be happy to change it to ensure that you pay the bill on time.
  4. Avoid charging perishable items such as groceries if you carry a balance each month. The reason is that you'll eat them right away but could end up paying for them for months, ultimately driving up the real amount you're paying for food. Coupon clipping doesn't help when a $3 box of Toasties ultimately costs $6 with interest.
  5. If you carry a balance, use your card for as little as possible -- when you write checks, use a debit card or fork over cash for each purchase, you'll be more conscious of your spending and will end up spending less.
  6. If your account is in good standing, ask whether your interest rate can be lowered. Even a percentage point or fraction of a point can make a difference. If you carry a balance, lowering your interest rate will reduce the amount you pay in the long run.
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