How are you using your credit cards? Do they sit in your wallet, longing to see the sunlight? Or are you getting the most out of the benefits that come with them? A lot of people claim they have a credit card to “build credit” or “in case of an emergency,” but these are often fringe benefits to having them. What exactly are you missing out on?
Choosing the Right Cards
First, you should figure out what constitutes the “right card” for you. It depends on what you like, to be honest. Does it come with perks like cashback or other kinds of rewards? There are a lot of credit cards that have perks like the Target REDCard, where you get 5 percent off every purchase, or the Chevron Visa Card, which offers a slew of discounts on gasoline. You should research all of the options available to you and see if you can find a credit card offered by stores and locations you frequent.
A good credit card for college students to have is Amazon. Many students use Amazon to avoid paying the markup often added by bookstores or to get the book if they slept in too many times. The only gas stations that offer credit card perks that I currently know of are Fred Meyer, Shell, Costco, and Chevron/Texaco. The cards to avoid are the cards you will most likely never use except for once a blue moon. This is because a lot of credit cards, like the GAP and Old Navy, will cancel your card on you if you don’t use it within a certain timeframe. No ifs ands or buts and certainly no warning. Be sure to check before you apply for a card that you will rarely use.
Rethink How You Use Your Card
Let’s be honest: You could use your credit card like a debit card in most situations. As I suggested in a previous article, you should consider using your credit card for daily purchases and just pay the balance every so often to keep your utilization down. Not only does this help build your credit, but it also saves you money on purchases you would already make. It might not feel like much at first. But keep track of your savings and cashback rewards. Whenever I need something for the house that I’ll buy at Walmart, I’ll buy it at Target with a Target REDCard and save 5 percent. Easy!
A Word of Warning
This is a great way to use your credit cards to build credit and to enjoy some perks. But it’s important for you to take care in how you do this. Always be sure to have enough in your checking account to cover your purchases before you use your credit cards. I can’t stress enough how important this is. In the past, I’ve found myself unable to make that payment and the lesson I learned was rough. My card had 24 percent interest on it, which isn’t too bad when you realize that’s two percent per month. But I didn’t really have an additional two percent to pay. Be sure to check out how much you should have in your savings account before getting too carried away.