Depending on your level of self-control and fiscal responsibility, credit cards can be your best friend or your worst enemy. Clearly, if you habitually whip your cards out on impulse and purchase items you just don’t need and can’t really afford, then you are likely to carry a credit card balance and pay interest. But if you’re frugal with your cards, use them to purchase only what you can afford at that time, and make your payments in a timely fashion, then you are far closer to utilizing your cards’ potential as tools for living a financially responsible life. On top of being responsible, here are a few higher-level credit card tips to help you save even more money and earn more rewards.
Push Your Due Date Back
Life can throw you curveballs, and you might find yourself in a position where you must make a purchase that you may not be able to pay back in time. For example, your child might need school supplies and new clothes before the school year begins in two days, but you’ve reached your limit and your billing cycle finishes in five days. You need leeway; request to push the end of your billing cycle back. Just call the credit card company to make the request. You may even be able to do this online. It isn’t something you can do regularly, but once, even two or three times should not pose an issue. Doing this buys you time until you receive your next paycheck. If you make such a purchase just after the end of a billing cycle, and your next payment isn’t due for nearly a month, then you could request to push your cycle back and gain another month for a nearly two-month interest-free period.
Gift Cards
People want to earn credit card rewards points, and continually fall into the trap of spending more just to earn the points. For instance, each dollar you spend in the average rewards program earns you a point, yet when you use your rewards to purchase merchandise or an airline ticket, the value of a point is a small fraction of that dollar spent. It doesn’t necessarily make sense.
Instead, you can try to use your credit card to purchase gift cards for places you regularly shop, and use the gift card later, visiting the store only as often as you normally would. Or use your credit card to purchase a cash card.
Additionally, find out what promotions your card offers. Many of them offer additional reward points on spending at grocery stores during certain quarters of the year. During those quarters, you can see if buying gift cards at the grocery store will earn you more points.
That said, always read the fine print and limitations on your credit card. Some stores won’t allow you to buy gift and cash cards using credit cards, whereas others will. And in extreme cases if the credit card companies think you’re "manufacturing" spend to just get points, they may cancel your cards altogether.
Merchant Categories
As mentioned above, credit cards offer bonuses for spending in certain merchant categories at specific times, usually during one or two quarters per year. For example, one credit card may offer double or triple the points on gasoline from January through March. Another card may offer double points at the grocery store for quarters two and four. Therefore, if you have a few cards (not too many!), and are aware of the merchant category bonuses and when they are offered, then you can take advantage and maximize on your rewards earning potential.
Maximize the Sign-Up Bonus
Opening too many credit cards just to take advantage of sign-up bonuses can be bad for your credit score, but if you open a business credit account at the same time as you open a personal one, then that’s like two birds with one stone. Another option is for your spouse to open the same credit card account when you do. This way, together you earn double the sign-up rewards. Just make sure you won’t be tempted to spend double, and you’ll earn a vacation to the Caribbean before you can say “sunburn.”
Bonus Boost
If you open a new credit card account, and then the credit card, shortly after, offers an even better sign-up bonus, well, that’s not fair. If you had delayed your giving them business, then you would have received more rewards points. It doesn’t make sense, but it happens all the time. There’s no way for you to know in advance. All you need to do is call up customer service and ask them to add the bonus boost to your account. It’s easy for them to do it on their end.
