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10 Rules Of Using Credit Cards You Must Know

10 Rules Of Using Credit Cards You Must Know

Credit cards can be an immense boon when you hit a really rough patch financially, giving you much needed breathing space when you need your cash for pressing expenses like rent, groceries or gas. That being said, credit cards can quickly go from being a great financial safety net to something that gives you immense grief later if you don’t use them wisely.

Below you will find 10 credit cards usage rules. Rules that if you follow prudently will allow you to reap the benefits that credit cards have to offer, without having to deal with the headaches that they can otherwise bring. Here are our tips for using credit cards wisely.

1. Don’t sign up for every credit card that comes your way!

If you already own one credit card or if you have a decent credit score, chances are that you will inevitably receive pre-approved credit card offers in the mail. This, however, doesn’t mean that you have to sign up for each one of those offers.

First, see if you need another credit card at all. If you really do, take half an hour to read through the various invitations you have received to see which new card could give you the best benefits. The important factors that you must consider are APR%, annual fees, introductory 0% interest periods, late payment fees, the credit limit, and any add-on card fees.

Remember, signing up for many credit cards is not only a way to unnecessarily increase your creditor base, it is also a potential way to negatively affect your credit score.

2. Keep your card’s outstanding balance at $0, as much as you can

When you use your credit card, you know that your credit card company gives you a few days of interest-free grace. If you pay off your balances during this period, you won’t be paying any interest charges, while also having the ability to rotate your cash for a few days.

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However, this will only happen if you pay off your balances. Let the outstanding balance accrue for just one month and you will quickly start to rack up high interest charges.

3. Avoid the dreaded minimum payment habit

One of the worst pitfalls that lead to succumbing to the perils of a credit card is when you only make minimum monthly payments. If you spent $2,000 on your credit card, your credit card statement is going to instruct you to pay only 2% of your outstanding balance as minimum payment, a payment which works out to $40.

Now, if that credit card charges you a 20% APR, a monthly interest charge of 1.6% is going to apply on the $1,960 that you will have pending, assuming that you just paid off the minimum payment. 1.6% of $1,960 is $32.

In other words, even though you think you have paid off $40 from your balance, you have essentially paid just $8 ($40 less $32) off your total balance.

If you keep up this trend, you will actually end up paying $8,960, over 30 years, to eventually pay off the $2,000 that you borrowed from your credit card company!

Quite shocking, isn’t it? This is why it is very important that you do your math right when planning your credit card repayment schedule.

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4. Never, Ever Miss a Payment Deadline

One of the cardinal rules of intelligent credit card use is to pay on time, every time. Though a lot of people intend to pay off their credit cards on time, many just forget.

Missing your deadline by a couple of days might not seem like that much of a big deal to you, but credit companies will be very quick to levy late fees and even possibly increase your APR%, especially if you have been late on more than one occasion.

If you have many credit cards and have a hard time keeping track of all the deadlines, it makes a lot of sense to keep a monthly alarm on your phone or calendar for each of your credit card deadlines, to make sure that you are never late.

5. Check and double check your statement

It is not uncommon for credit card statements to have erroneous transactions. Sometimes, a purchase could have been billed twice on your credit card and you will never find out unless you physically inspect your credit card statement.

Moreover, if you use your credit card for recurring payments, especially for online facilitated services, you can quickly forget what charges accrue on your credit card statement every month.

Taking a monthly look at your credit card statement will allow you to stay on top of your expenses and also help you quickly investigate purchases or charges that might have been added to your account.

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6. Report lost or misused credit cards immediately

If you ever misplace your credit card or receive a text that shows that an unknown transaction has been debited to your credit card, it is imperative that you immediately call your credit card company to block the credit card.

When your credit card ends up in the wrong hands, your hard earned credit can get used up in just a few seconds. Though you will have the opportunity to prove that your credit card was used fraudulently, it will without a doubt be a long, frustrating and arduous process that you can easily do without.

7. Never withdraw cash from your credit card

If your credit card’s high APR% wasn’t bad enough, you are going to be in for a rude shock when you find out more about how much your credit card company is going to charge you when you do a cash advance on your credit card.

First off, you are going to be charged 2% to 4% of your withdrawal amount as a cash advance fee. Next, you are going to be charged an ATM fee, about $5. Then, on top of all of this, you are going to pay an interest rate that is much higher than your usual APR%. Lastly, you don’t get an interest-free grace period on your credit card cash advances.

8. Don’t charge your card just to earn rewards

Free airline miles, car rentals or redeemable points at various stores can sound like exciting incentives to use your credit card. You might think that it is one way for you to actually make the credit card company pay you for a change, right? Wrong!

The fact of the matter is that the odds are always in favor of the credit card companies. They know that you have to spend a significant amount of money on credit cards to earn a reasonable amount of points that you can then use like spending money. They also know that you will invariably falter when it comes to keeping your outstanding balance at $0.

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When they get the chance to accrue interest on your credit card, the interest you pay on your credit card is easily going to be more than the rewards you are eligible for, thereby giving you a financial expense instead of a gain.

9. Negotiate and bargain with your credit card company

Have you been a good credit card customer over the years, paying off your balances and keeping balances low? If yes, you deserve to be rewarded with lower interest rates. All you have to do is ask for it. Call your credit card company’s customer service line and ask for an account manager.

Once you get on the line with them, ask them for a revision of your APR%, citing that you deserve to be charged less for having been an ideal customer. You will be surprised to know that such revisions are often carried out by credit card companies. They will however rarely do it on their own though.

Pick up that phone and ask for it. You can also ask for late payment fees to be reversed when you make that rare late payment.

10. Call in advance if you are having trouble paying off your credit card

If times are tough and you just don’t see how you are going to feasibly pay off your credit card in the coming months, it might be prudent to make a proactive call to your credit card company, explaining your difficult financial situation.

When you do this, they will work with you on an alternative repayment plan. Besides getting slightly relaxed repayment terms and more time to pay off your credit card, you will also reduce the chances of your credit score being negatively affected the moment you miss or delay a payment.

Featured photo credit: Credit Card Volcano by Wilkins Gallo De Oro via flickr.com

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Last Updated on June 20, 2019

50 Businesses You Can Start In Your Spare Time

50 Businesses You Can Start In Your Spare Time

Most people want a few more dollars in their wallets. But between an employer and family, the time most of us can devote to a second job is severely limited. Running a small side business can provide a few more options: you don’t have to show up at a set time and you can use skills you already have. Not all will be perfect for everyone, of course, and I’m sure that you’ll have a few ideas of your own after reading this list. If you’d like to share any other business ideas, please add them in the comments.

  1. Selling collectibles — From antique books to teddy bears, there are plenty of opportunities to buy and sell collectibles. It’s important to familiarize yourself with the collectible of your choice but if you choose something that you’ve been collecting for a while, you’ve got a head start.
  2. Locating apartments — It can take time to sort through apartment listings, but you can make some money by finding the perfect apartment for a renter.
  3. Baby proofing — New parents often prefer to bring in an expert to make sure their home is safe for a new baby.
  4. Calligraphic writing — If you’ve got elegant handwriting, you can pick up gigs writing or addressing wedding invitations, holiday cards and more.
  5. Selling coupons — Search on eBay for coupons right now and you’ll see thousands of listings for coupons. It’s just a matter of clipping and listing what you find in your Sunday newspaper.
  6. Pet training — A surprising number of people don’t know where to start in training a pet. Even teaching Rover simple commands like ‘Sit’ and ‘Stay’ can bring in a few dollars.
  7. Running errands — A wide variety of people want to outsource their errands, from those folks who aren’t able to leave their homes easily to those who have a busy schedule.
  8. Researching family trees — Amateur genealogists often call in experts, especially to handle research that has to be done in person in a far off place. If you’re willing to go to a local church and copy a few records, you can handle many family tree research requests.
  9. Supplying firewood — The prerequisite for selling firewood is having a source of wood; if you’ve got some land where you can cut down a few trees, you’ve got a head start.
  10. Hauling — As more people trade in their SUVs for compact cars, hauling is becoming more important: people have to rent a truck or hire a hauler for even small loads.
  11. Image consulting — Image consultants provide a wide variety of services, ranging from offering advice on appearance to teaching etiquette.
  12. Menu planning — For many people, the trip up in eating home-cooked or healthy meals is knowing what to prepare. Meal planners set a schedule to solve certain dietary problems.
  13. Microfarming — Cultivating food and flowers on small plots of land allows you to sell produce easily.
  14. Offering notary public services — Notary publics can witness and authenticate documents: a service needed for all sorts of official documents.
  15. Teaching music — If you’re skilled with a musical instrument, you can earn money by offering lessons.
  16. Mystery shopping — Mystery shoppers check the conditions and service at a store and report back to the store’s higher-ups.
  17. Offering research services — Just by reading up on a topic and compiling a report on it can earn you money.
  18. Personal shopping — Personal shoppers typically select gifts, apparel and other products for clients, helping them save time.
  19. Pet breeding — Purebred pets can be quite value, especially if you can verify their pedigree.
  20. Removing snow — During the winter months, shoveling walks can still be a reliable way to earn money. You might be asked to take care of the driveway too.
  21. Utility auditing — As people become environmentally-concious, they want to know just how efficient their homes are. With some simple testing, you can tell them.
  22. Offering web hosting services — Providing server space can be lucrative, particularly if you can provide tech support to your clients.
  23. Cutting lawns — An old standby, cutting lawns and other landscaping services can provide a second income in the summer.
  24. Auctioning items on eBay — Want to get rid of all your old stuff? Stick it up on eBay and auction it off.
  25. Babysitting — Child care of all kinds, from babysitting to nannying, can offer constant opportunities.
  26. Freelance writing — If you’ve got the skills to write clearly, you can sell your pen for everything from blogs to advertising copy.
  27. Selling blog and website themes — Do a little designing on the side? Customers that don’t want to pay full price for a website will often pay for a template or theme.
  28. Offering computer help — Particularly with people new to computers, you can earn money by providing in-home computer help.
  29. Designing websites — It may require a little skilled effort, but designing websites remains a reliable source of income.
  30. Selling stock photography — For shutterbugs, an easy way to put a photography collection to work is to post it to a stock photography site.
  31. Freelance designing — Check with local businesses: you can provide brochures, business cards and other design work and get paid a good fee.
  32. Tutoring — Math and languages reamin the easiest subjects to find tutoring gigs for, but there is demand for other fields as well.
  33. Housesitting / petsitting — Stopping in to check on a house or pet can earn you some money, and maybe even a place to stay.
  34. Building niche websites — If you can put together a site on a very specific topic, you can put targeted ads on it and make money quickly.
  35. Translating — The variety of translating work available is huge: written word, on the spot and more is easy to find even on a part-time basis.
  36. Creating custom crafts — No matter what kind of crafts you make, there’s likely a market for it. Etsy remains one of the easiest places to sell crafts.
  37. Setting up a wi-fi hotspot — With a little bit of equipment, you can set up a wi-fi hotspot and charge your neighbors for the access they’ve been ‘borrowing.’
  38. Selling an e-book — You can write an e-book about almost anything and put it up for sale online.
  39. Affiliate marketing — If you’re willing to market other companies’ products, you can earn a cut of the sales.
  40. Renting out your spare room — From looking for a long-term roommate to listing your guest room on couch surfing sites, that spare room can make you money.
  41. Offering handy man services — Handling small household tasks can provide you with plenty of work, although you’ll probably be expected to have your own tools.
  42. Teaching an online class — Share your expertise through a website, an online seminar or variety of other methods.
  43. Building furniture — For those with the skill to create handmade furniture, selling their creations is often just a matter of advertising.
  44. Providing personal chef services — Personal chefs prepare meals ahead of time for customers, leaving their customers with a full freezer and no mess.
  45. Event planning — From planning corporate events to bar mitzvahs, an event planning business can require plenty of work and offer plenty of pay.
  46. Installing home safety products — Particularly as Baby Boomers age, people able to install handrails and other home safety products are in demand.
  47. Altering / tailoring — If your sewing skills are up to par, altering garments is coming back as people try to stretch more wear out of their clothing.
  48. Offering in-home beauty services — Hair cuts, makeup and other beauty services that can be performed at home have a growing demand.
  49. Business coaching — Helping others to establish and develop their businesses can provide many opportunities to earn money.
  50. Writing resumes — Writing resumes can provide a reliable income, especially if you can put a polish on a client’s credentials.

There are plenty of offers that claim to provide you with the opportunity to make thousands of dollars a week. Unfortunately, none of these businesses will provide that sort of income, but they aren’t scams either. They were chosen because they all require a minimum investment to get started — some require nothing more than a flyer advertising your business. Even better, if you do enjoy any of these businesses, there is a potential with most of them to continue to expand — perhaps even to the point of going full time.

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Featured photo credit: Omar Prestwich via unsplash.com

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