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Despite the bad reputation credit cards have earned over the years, they really do offer numerous benefits when they’re used correctly.  With financial discipline, a credit card can simplify your financial record keeping and earn you some additional rewards- here’s how:

  1. Select a credit card that offers rewards that you’ll really use.  If you travel frequently, choose from reward credit cards that give you discounted flights, free hotel nights or discounted rental cars.  If you don’t travel, select one that offers cash back, gasoline rewards, or some other program that will give you something you’ll actually make use of in exchange for using the card. 
  2. Figure out how much you earn on a monthly basis, and how much your expenses are.  In other words- figure out where your money goes and decide which of those monthly purchases could be made using the credit card.  Make as many of your monthly purchases using the same credit card as you can, and eliminate the need to write checks for each of your transactions.
  3. Pay your credit card balance off in full at the end of every month to avoid finance fees and interest charges.  You’ll still accumulate the rewards based on the purchases for that month.
  4. Using a credit card for the majority of your monthly expenses can reduce the number of checks you write, and reduce the number of transactions you keep track of in your check register- therefore, reducing the possibility of making a costly mistake in your check register (You’ll write one large check at the end of the month to cover your monthly expenses instead of multiple, smaller checks for each individual account).
  5. A credit card statement offers a detailed transaction report to show you where your money is spent each month, making it easier to see where you can cut back on unnecessary expenses.

 Using this technique will not only build up the rewards you earn from your credit card fairly quickly and simplify your financial record keeping, but it can also allow you to earn some interest on your income before you write out the check to pay your expenses off at the end of each month.  Simply deposit all of your income into an interest earning checking or savings account until the day you write the check to pay off your credit card account, and you’ll be able to benefit from additional interest due to having the money in your account for a longer period of time.



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