Credit Card Tips

Credit cards are an excellent way to manage cash flow, if you use them correctly.  Here are some a few tips to get the most from your credit card.

1: Stay clear of cash advances: unlike purchases of credit cards which have an interest free period, cash advances attract interest from the moment you make a withdrawal via a ATM machine.  Not only do you pay interest straightaway, the interest rate charged is often much higher than what you would pay on purchases.  Some banks in charge a set fee for withdrawals made on top of the interest charges.  This is a very expensive way to withdrawal money and should only be used as a last resort.

2: Pay highest interest cards off first: If you have more than one credit card you should focus your attention on paying off the cards with the highest interest rate first. Keep doing this until you repay the balance in full and then focus your efforts on the card with the next highest interest rate.  Another option is to move all your crediut card debt across to a low interest credit card through a balance transfer.

3: Pay more than the minimum balance: If you only pay the minimum balance each month it could take years to pay your credit card bill off in full. Ideally you should pay your bill in full each month if you can afford to do so but naturally that is not always practical. Try to pay off as much as you can above the minimum balance and you will be surprised at how much quicker you can lower your outstanding balance and reduce the amount of interest charges you pay.

4: Make your cash go further: By using a credit card to make as many of your everyday purchases as possible such as supermarket shops and even bills can improve your cashflow and work to your advantage as many cards have up to 55 days interest free on purchases.  You can put all your income into a high interest saving account or offset the income against your mortgage to save on interest charges until you bill is due at the end of each month.  Rather than using the cash to make the purchases you money is working harder for you during the credit cards interest free purchases.

For additional information on credit cards or related topics please visit our library of credit card articles.