Credit cards. They usually have a bad reputation because of our bad money habits and the $7,000 average household debt held on a card. Additionally, the credit providers claim they want to help us get what we want and/or need. But in fact, they are secretly hoping we carry a balance each month so they can make money off the interest they charge us. However, what if I told you there was a way to stick it to these credit card providers? Well you’re in luck! Today we will be discussing three different ways to strategically use your credit cards. 

Rewards Credit Cards

We all have things that we like; retail therapy at “Tar-gèt”, catching flights and not feelings, or even that avocado toast with your friends on the weekends. If you’re strategic, there are actually credit cards that will give you cash/points to do the things you like. Who doesn’t like free stuff? For example, a lot of living arrangements require us to pay rent. My wife and I currently use our cash rewards card to pay our rent and we get back roughly $30 bucks a month. When you attach a rewards card to everyday expenses that you pay such as groceries, utilities and internet, the cash back adds up. We're talking about hundreds of dollars per year that can be used to either pay for other items or put right back on your credit card bills. For travel cards, it could mean a couple free trips throughout the year. For retail cards, it could mean free retail therapy sessions during the year.

[RESPONSIBLE] Balance Transfers 

Balance transfers can be a life saver for some individuals [Note: emphasis on responsible]. A balance transfer is the process of transferring high-interest debt from one or more credit cards to another one with a lower interest rate. Using this strategy will help you apply more payments to the principal balance and in return, eliminate credit card debt faster. As of late, several low interest credit cards are offering introductory incentives such as 0% APR for the first 12-18 months. This gives you the opportunity to pay back ALL your credit card debt without worrying about interest. This strategy could potentially save you hundreds of dollars on interest depending on how much credit card debt you owe. Remember, balance transfers are only effective if you don’t add additional debt and pay it off within the 0% APR period. 

Pay The Full Balance Each Month

Yes, you read that right. Do not just pay the minimum, but pay the entire credit card bill balance each month! This is the only guaranteed to avoid interest charges on your credit card. In return, you’re preventing these credit card companies from making money off you. You know how Jay Z said something along the lines of “if you can’t buy it two times, you can’t afford it”? We should use this same concept when it comes to our credit cards. Were those Jordan’s worth the added cost of interest if you couldn’t pay off the credit card bill balance? 

When it comes to credit cards, we should all try and be strategic with our swiping. Get those reward points towards your next flight and avoid those interest charges! As always, I want to hear from you! What kind of credit card do you currently have? What ways do you get the most bang out of your swipe? 

Holding you accountable,

DWM