Advertising
Advertising

4 Steps to Optimize Your Credit Card Portfolio

4 Steps to Optimize Your Credit Card Portfolio

Credit cards are easy enough to get. But just because you can get one, doesn’t mean you should. Use the wrong credit card, and it could cost you thousands more than you intended. Use the right one, and it could earn you thousands more than you ever imagined.

That’s why, every year you should take a look at the cards in your wallet, and re-calibrate your “portfolio”. Get rid of the cards that aren’t performing and replace them with cards that better match your spending or borrowing habits. The impact of doing so could cut your rates by more than half, or earn you a free flight faster than you ever expected.

Advertising

To give you an idea of how much you can gain by optimizing your credit card portfolio annually, with the exact same spend, we know of one cash back card that will earn you $456 in cash back EVERY year. Using a sub optimal card, you would only receive $99 cash back. That’s a $357 difference per year.

Alternatively, you could be paying 20% interest on thousands of dollars in credit card debt. Why not get a balance transfer card and pay 0% for the next 12 months? Doing so can save you $1,420 in 1 year of interest payments alone!

Advertising

Here are 4 strategies to optimize your credit card portfolio.

1. Determine What Type of Credit Card User You Are

Generally, users fall into one of 3 categories. You either pay off your credit card every month, always maintain a balance, or occasionally maintain a balance. If you pay off the entire balance of your credit card at the end of every month religiously, you’re going to want a rewards card. If you always maintain a balance, or frequently only pay the minimum payment, you’ll want a low interest credit card option. If you’re somewhere in the middle, you may want both!

Advertising

2. Compare The Market

Now that you know what type of credit card user you are, scour the market for the best credit cards that match your needs. If you pay down your balance every month, just look at rewards credit cards. Interest rates will have no impact on you. Look for sizable welcome bonuses, annual fee waivers (so you can try before you buy), and rewards programs that suite your preferences (cash-back, rewards, miles, retailer). Find a card that maximizes your rewards given your spending habits.

If you maintain a balance, get a low interest credit card. There are two considerations here. If you already have a credit card balance, look for a balance transfer card with a 0% rate for the longest promotional period possible and the lowest balance transfer fee possible. Don’t get fooled by a low rate, with a high transfer fee in the small print.

Advertising

If you know you’re going to carry a balance in the future, look at one of the many low interest credit cards for new purchases. You’ll want to look for a low rate credit card that has no annual fee and a low fixed interest rate that won’t fluctuate over time. Don’t get fooled by promo rates. Get a credit card you can keep in your wallet over the course of the year for any purchases you know you’re not going to be able to pay down right away.

3. Add New Credit Cards

Now that you’ve done your research, apply for the cards that optimize your credit card usage. Don’t apply for 5 cards at once, you’ll blow your credit score. Depending on your current credit score, adding a credit card every few months will be just fine. There’s no limit to how many credit cards you can have. There’s only a limit to how many you can apply for in a very short period of time.

4. Purge Your Wallet

Now that you’ve added the credit cards you want, it’s time to get rid of the cards you no longer need. The first priority will be to get rid of any credit cards with an annual fee that aren’t giving you optimal value. Don’t worry about the impact of closing accounts on your credit score. Any minor bump will be temporary, especially if you replaced an existing card with a new one. Regardless, despite what your current credit card company will tell you, it makes no sense to pay $120 a year in annual fees, if you’re not using a credit card and it provides you with no value.

Conclusion

Don’t just do this once and forget about it. You should be adding and purging credit cards from your wallet constantly. There are new credit card offers and products on the market all the time. Credit card issuers tend to give their richest deals to new customers, don’t be afraid to take advantage. Loyalty definitely doesn’t pay.

More by this author

Marc Felgar

Marc Felgar is an aging, health & senior care expert focused on improving the lives of mature adults.

The Common Causes of Sleep Problems (And How to Fix Them Fast) The Best Way to Sleep to Relieve the 7 Most Common Ailments 19 Fun Activities for Seniors to Stay Active Physically and Mentally Getting Fit Over 40: The 7 Best Workout Routines for Beginners 6 Ways to Care For Your Aging Parents From a Distance

Trending in Money

1 Life Insurance: A Secure Way To Protect Your Future. 2 How To Save Money On Groceries: 13 Quick Tips 3 10 Investment Tips For Beginners 4 Top 6 Hacks on How To Build Credit Fast 5 Want to Get Free Product Samples Like Bloggers and Beauty Gurus Do? Read This.

Read Next

Advertising
Advertising
Advertising

Last Updated on March 29, 2021

Life Insurance: A Secure Way To Protect Your Future.

Life Insurance: A Secure Way To Protect Your Future.

Life is a journey full of ups and downs. No one can actually predict what might happen the next moment; there are times where the happiest moments do not even take a second to turn into the gravest. Planning for your future can help you face such unwelcomed but irrepressible situations with much ease. We all want to make every memorable event of our life more special and to cherish all those moments happily and worry less, you must financially plan your future. But no one has control over life and death. Who would wish to see his family suffer in his absence? Insurance hands over the financial jeopardy of life’s happenings to an insurance company.

Importance of getting a life insurance

No one has control over life and death. Nobody would like to see their family suffering in an absence, and that’s why many people recommend life insurance. A life insurance plan is one of the best ways to secure the future of your family, even against those financial troubles after an untimely demise. These plans are safe and credible, and you could trust them for your family’s better future.

Advertising

On the other hand, a life insurance policy is a contract between a company (insurance provider) and policyholder in which the insurance provider ensures to pay a certain amount of money to the nominated beneficiary in case of the policyholder’s death during the term of the agreement. There are different types of insurance plans, and it is important for you to know the benefits of those plans such as a funeral, medical or some life expenses provided they are mentioned in the agreement.

Choosing the right insurance plan

If you’re about to select an insurance plan, you should consider some important factors:

Advertising

  • The time at which you start investing in a program and the number of family members you want to get insured. Obviously, a married man with two children has different needs compared to a single one. The number of persons who are dependent on an individual also varies from person to person.
  • The next thing you need to consider is you and your family needs. What are your child’s dream, your retirement plans, for how long would your dependents need financial support, any personal injury, etc. And do not forget those events or situations that will surely demand a huge sum of money.
  • The next thing one must consider is your current income. You should preferably choose a plan which you can afford.

Now you must be having a pretty clear idea of how to choose the best plan for you. Further, you should also compare various plans offered by different companies and numerous sites available online that help will you to compare them.

Differences between life insurance plans

Here’s a short brief of some plan categories you can choose according to your needs:

Advertising

  • Term Insurance Plan – You have to pay once, and your nominee gets the paid money under your misfortune demise. It ensures a person for a fixed time. If you survive the policy period, you do not get your premiums back.
  • Whole Life Policy – This plan continues for your lifetime. Under this, the policyholder has to pay regular premiums, until their death.
  • Endowment Policy –  In case the individual dies during the tenure, the beneficiary gets the amount assured. If the person survives the policy tenure, they gets back the premiums paid with other investment returns along with several other benefits.
  • Money Back Policy – In this a portion of the money invested is returned to the investor at regular intervals. If you survive the insurance term you get the entire amount back; else the beneficiary receives the entire sum assured.
  • ULIPs – These are the life insurance plans that offer you future security plus wealth creation options.

Many people do not opt for whole life policy and endowment policy because of the high amount of money you need to pay, while others may prefer to opt for these if they have a high life expectancy. Surely you will find the best one for you.

So what are you waiting for? Plan for your future and live a happier and carefree life today.

Advertising

Featured photo credit: aryehsampson.com via aryehsampson.com

Read Next