A credit card is the most important financial tool which makes today’s financial life better. If used properly, a credit card can fetch multiple rewards for you.
However, if you use them incorrectly, then you might incur huge debts within a very short period.
Currently, many credit card users are avoiding credit cards due to too much credit card debt. Their excessive spending habits triggered this issue irrespective of any class. Making payments through a credit card is currently leading them towards huge credit card debts.
But people can avoid this issue by choosing a smart credit card. But before opting for a credit card, you must consider the benefits that can ease up your financial life.
Here, I am going to tell you about 7 possible ways you can choose a credit card that maximizes your benefits.
How to choose your credit card with the biggest benefits
First, you should get enough information about the offered credit card benefits. If your credit card also gives you all or most of the benefits, you have chosen the right credit card.
Let’s check out those basic benefits:
1. Interest-free grace days
Your credit card billing cycle can increase your payment benefits. If you take into account the credit card’s bill generation date and your bill date properly, you may have nearly 30 to 50 days to pay off your bills.
Normally you have 20 days after the due date to pay off your credit card bill. That means from the first day of your billing cycle till your due date you are getting a total (20+30) = 50 days to make payment. On the other hand, you’ll have only 20 days to use your card a day before the statement generation date.
Let me make it clear to you. If you want the benefit of the entire 50 days to pay off the credit card debt, you must try to buy big items on the 1st day of a billing cycle, which is the next day of your previous bill generation date.
This way you’ll get 20 days or more to handle your money and get the paycheck to pay off your bills.
So, choose a card or provider who can provide you with the opportunity to adjust your billing cycle as per your choice.
2. Budget-friendly benefits
You may select a credit card that gives you benefits considering your budget. So, you should research well and stop using credit cards which are not suitable. Normally you must avoid high APR cards as much as possible.
After that, you should set a budget for your probable monthly credit card spending. Use your budget as a model and select a credit card that suits your monthly spending limit. Credit cards with high credit limits can entice you more than anything.
But remember, you should opt for a credit card with a low credit limit. It’ll help you to avoid impulse buying and help you to repay easily. Make sure you pay the bills within the interest-free period every month.
3. Rewards offered for daily spending
People usually use credit cards to pay for their daily expenses like groceries, power bills, water charges, gas, and many more. So, a credit card, which can give you rewards on daily transactions, can be surely considered as your preferred card. Earning big rewards and saving more is the best benefit a credit card can provide you.
4. Multiple cards with different billing cycles
If you want to keep multiple credit cards and get the benefits, make sure you choose different billing cycles for each of your credit cards. This way you may diversify the payment dates as per your priority and also have a decent time frame for making payments.
Different billing cycles can ease the process of managing multiple credit card bills on time and keep you away from credit card debt.
Different billing dates can be useful when you face a financial crisis. So, think wisely and consider the billing cycle.
5. Big reward points
Reward points are the most popular of all the benefits that credit cards may give you. It is also an effective way to maximize your transactions.
Normally, it is advisable that you determine, as early as possible, what you are going to do with those reward points. If you want to pay the outstanding bill using the points, then you should not wait until you save a big chunk of rewards in your account.
You should use your points every month to pay off in full or as part of your outstanding bills. However, if you want to use your reward points to upgrade your flight ticket or book a luxurious hotel while traveling, you must wait and accumulate enough points to redeem that benefit.
So, it is recommended that you should go for a credit card which may give you good reward points and it shouldn’t expire soon.
6. Balance transfer
The balance transfer option may give you the opportunity to transfer your high-interest credit card balances to a new credit card. That new credit card might be offered with a 0% interest on transferred balances.
This allows you to save money on the interest rate charged on your existing credit card. So, if you are suffering from credit card debt and want to reduce your interest rate, you may choose a balance transfer card.
Most of the time consumers fail to maximize the benefits of their credit cards just because they did not choose their cards carefully. While choosing a credit card, a consumer should do proper research regarding all the benefits he/she is getting from the credit card company.
Get as much information as possible and decide whether your credit card turns into a liability or an asset.