credit cards

What's the best way to use credit cards?

Credit Cards » 5 Ways To Get More From Your Credit Cards

5 ways to get more from your credit cards
What's the best way to use credit cards?

Use your credit cards wisely, and you can gain a free short-term loan on purchases. Pile up balances or pay late, and suddenly you can face expensive debt, fees and other penalties. The secret of smart card use: Take advantage of the perks, and avoid the penalties.

"If you want to maximize the value (of your cards), you don't want to rack up costs," says Josh Frank, senior researcher at the Center for Responsible Lending. "And with a balance, you rack up costs."

Also important: making payments on time, he says. Not only do you avoid penalty fees, but you also avoid onerous penalty-rate hikes.

Some issuers also put your rewards at risk when you pay late, says Frank. You may stop accruing rewards, lose the rewards you've already accumulated or get charged a fee to regain them, he says.

Paying late can even lower your credit score if the delinquency winds up on your credit report.

Want to save money? If you carry a balance, you're probably better off with a lower rate than a rewards card, says Frank. Often what you pay in interest is more than what you make in rewards, he says.

And forget using your card at the ATM. Skip those cash advances, says Dave Jones, president of the Association of Independent Consumer Credit Counseling Agencies.

"The interest rates on those are always very high," he says.


Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

Show Bankrate's community sharing policy
          Connect with us
Product Rate Change Last week
Balance Transfer Cards 16.22% --0.00 16.22%
Cash Back Cards 16.49%  0.07 16.42%
Low Interest Cards 11.44%  0.09 11.35%
Credit cards on a table

Get advice for managing credit cards, building your credit history and improving your credit score. Delivered weekly.


Credit Card Blog

Mitch Strohm

Will card fraud increase at the pump?

Fraudsters may be taking advantage of the lack of security at pay-at-the-pump card readers.  ... Read more

Partner Center

Connect with us