How to optimize your credit cards

1. Your credit report and credit score are important. This is because if you have a good credit score you will get a better(lower) interest rate on loans. This is important because you will pay less. You will save more money.You can improve your credit score if you optimize the use of credit cards.

2. There are a few things to think about when you get a new credit card:

  • Avoid the credit card offers you get in the mail. Stay away from cards issued by every single retail store. They are usually not good deals. Make an effort to choose a good card.
  • The best way to choose a card is to compare cards online.
  • Have around 2-3 cards and not many.
  • Choose a card which gives you rewards that you value( cash-back, travel, dining, etc). It has to make sense for you.

3. Pay off your credit card in full every month.

4. Choose a credit card that has no annual fees, or the rewards are far, far more worth than the fees.  If the credit card has annual fees and the rewards are not worth the fees, get the fees waived by calling the credit card company.

5. Negotiate a lower interest rate(APR-annual percentage rate)

6. Keep your credit cards for a long time and keep them active.

7. If you do not have any debt and you can pay off your credit card in full every month, get more credit. This improves the credit utilisation rate( makes up a good percentage of your credit score), which is how much you owe divided by your available credit. A lower rate is better. You can do this by calling the credit card company and requesting a credit increase every 6-12 months.

8. Use the rewards, perks and privileges your credit card offers you.

9. Avoid closing your accounts unless really necessary. If closing a credit card account, do not do it within 6 months of filing a loan application. Make sure you keep your credit utilisation score the same if you close an account.

10.The zero percent transfer game is complex , likely to go wrong and  mess up your credit score. Don’t play the game.



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