Advertising
Advertising

5 Credit Card Habits That Will Have Your Credit Cards Printing Money, Instead of Burning It

5 Credit Card Habits That Will Have Your Credit Cards Printing Money, Instead of Burning It

Credit cards can do one of two things. They can earn you tons of value through rewards, points, miles, cash and perks. Or, they can burn a hole through your wallet with fees, penalties and sky high interest rates.

Here are 5 habits that will turn your credit cards into money earning power houses.

1. Free Loans

Did you know there are two ways you can get a bank to lend you money for free? A credit card’s grace period essentially lends you money with no interest from the time you make a purchase to 21 days after you receive your credit card statement. That’s free float that can bridge a short term cash flow issue or allow you to earn interest (although not much nowadays) on the banks dime.

Advertising

Another way to squeeze free money out of a bank is through 0% balance transfer credit cards, cash advances and purchase rate promotional periods. Many credit cards offer 0% promotional rate for limited time periods. Take advantage and you can either transfer high interest debt to 0%, or borrow money for a new purchase completely free for 6-12 months and more sometimes.

2. The Golden Rule

Missing credit card payments can jack your rate, trigger late fees and destroy your credit score. The challenge is, no matter how good our intentions are, many of us get distracted and fail to make our payments on time.

There is a fail-safe way to never be late on a credit card payment again. By scheduling automatic monthly payments to your credit card, you’ll have the choice to pay down your entire balance or your minimum monthly payment by the statement due date. You’ll literally never be late again.

Advertising

3. Every Dollar Counts

If you’re going to make a purchase you might as well get rewarded for it. Why use cash or debit cards when you get nothing in return. Credit cards are a great way to manufacture significant savings on everyday purchases like gas, grocery, restaurant and pharmacy spend.

Many of the best cash back credit cards now offer opportunities to earn 5% in cash rebates in selected merchant categories. In fact, you can even combine multiple cash back credit cards with bonuses in different categories to maximize your earnings on all your spend.

Whether you’re buying a pack of gum, jeans or booking a cruise, get rewarded for every cent you spend. Not only will you maximize your rewards, you’ll also get the added budgetary benefit of seeing exactly how much you spend and where on your credit card statement.

Advertising

4. Welcome the Bonus

Yes, earning rewards from your credit card spend is valuable. But credit card issuers give away the most value in their sign-up bonuses to lure new customers. Think about it! Do you want to spend $50,000 to earn 50,000 points, or simply get a new credit card and earn the 50,000 points? Why do you wait 2-3 years for a free trip when you can get it right away?

The lesson is, loyalty doesn’t pay. Too many people stick to the same credit card year after year. Instead you should get a few new cards with significant welcome bonuses each and every year and watch your rewards multiply exponentially – rinse, wash, repeat. When doing so, just make sure to take note of the credit criteria, minimum income and minimum spend required to get approved for the card and receive the bonus.

5. Get Perky

Not only can credit card perks add comfort and luxury to your travels, they can also save you real dollars.

Advertising

Look for cards that offer perks with real cash value, such as free bags at check-in ($25-$35 in savings per bag), free roadside assistance ($65 value per year), free annual companion ticket ($250+ per year), complimentary travel insurance ($400+ per year), free wi-fi ($10 per day), free lounge access ($40 per visit) and free extended warranty coverage ($100+ per year).

Conclusion

Credit cards do have a dark side. But used properly, as they are by millions of people, they can bring lots of value to your pocket. Instead of running scared, embrace the positive, limit the negative and watch your credit card rewards bank bulge with points, miles and cash to spare.

Featured photo credit: Kaiyan / Flickr via flickr.com

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) 7 Memory Boosters That Actually Work Getting Fit Over 40: The 7 Best Workout Routines for Beginners Yoga Benefits for Men and Women Over 40 (And How to Get Started Now) 19 Fun Activities for Seniors to Stay Active Physically and Mentally

Trending in Money

1 How Being Smart With Your Money Leads to Financial Success 2 17 Practical Money Skills that Will Set You Up for Early Retirement 3 25 Things to Sell to Make Extra Money Easily 4 How to Pay off Debt Fast Using the Stack Method (A Step-By-Step Guide) 5 30 Fun Things To Do With Your Friends Without Spending Much

Read Next

Advertising
Advertising

Published on September 17, 2018

How Being Smart With Your Money Leads to Financial Success

How Being Smart With Your Money Leads to Financial Success

Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

1. Avoid being “penny wise but pound foolish”

It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

2. When you want something big, wait

Impulsivity can get you in trouble in most aspects of life. Finances are no different.

It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

Advertising

So, you get the itch.

You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

Here’s where you have to take a step back.

Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

The impulse faded. And you just saved yourself a ton of money.

3. Live smaller than you can afford

You finally get that big raise. And you want to celebrate – and why not?

You’ve been looking forward to this forever. And after all, it was all due to your hard work.

That’s fine, splurge a little. However, make it a one-time deal and be done.

Advertising

Don’t get caught in the trap that just because you’re now making more money, you should spend more.

Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

4. Practice smart grocery shopping

Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

Create a grocery budget

Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

Make a list… and never deviate

Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

Advertising

You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

These impulse decisions will lead to overspending, which will derail your grocery budget.

Eat before going grocery shopping

It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

This makes it much easier to stick to your grocery plan.

5. Cancel your gym membership

Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

The average gym membership costs around $60 per month. That’s $720 a year.

Advertising

Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

It’s baby steps… And baby steps can start now!

I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

Featured photo credit: Unsplash via unsplash.com

Read Next