How to Work Credit Cards Responsibly

How Credit Cards (And Their Issuers) Take Advantage of You

The first step to using credit cards to your advantage is understanding what you’re up against. Credit card issuers use a number of strategies—some more apparent than others—to incentivize spending and line their pockets with your money. These include:

1. Offering rewards, such as travel points that can be used for flights, hotels, car rentals, etc., and cashback on things like gas, eating out at restaurants, groceries, streaming service subscriptions, and more. The more you spend, the more rewards you get!
   
   
2. Providing welcome bonus rewards for spending a certain amount during the first month after signing. “Spend $1,500 in the first month and instantly receive 15,000 reward points!” Who could resist that?


3. Charging fees, including annual fees, late balance payment fees, foreign transaction fees, fees for exceeding your credit limit, and more. You’d be surprised how many they sneak in there.


4. Low or 0% introductory rates to encourage new customers to sign up and start spending. These rates increase significantly after the intro period ends, which can quickly spell trouble for a user who hasn’t been diligent about paying off their balance every month.


5. High interest rates. Really high interest rates. Seriously, use your rate to total up the interest on your credit card purchases last month and see how much it cost. Or check your statement for interest charges on your balance. These rates are the highest out of all loans, and they can easily cause your interest volume to become a large percentage of your entire balance.


6. Expiration dates on points. To be fair, most credit card rewards don’t expire as long as your account stays active, but some hotel and airline rewards do expire if you don’t use your account for anywhere from 1-3 years, depending on the program.

With these factors on your radar, you can make informed, goal-oriented decisions about what credit card you sign up for and how you use it.

Tips on How to Make Credit Cards Work for You

First things first, the question you need to ask yourself is: Am I a credit card person?

By that we mean, do you prefer the safety and convenience of debit cards? Do you not want to worry about paying a balance every month? Can you resist spending with your credit card when you don’t have the cash to back it up? Do you already have multiple credit card balances that need paying off?

You know yourself better than anyone, and based on your honest answers to these questions, you should be able to determine whether it’s a wise financial decision to own and use a credit card responsibly.

If not, then congratulations, you have one less financial factor to keep track of. If so, discover how to make credit cards work for you with the following tips:

1. Look for a credit card with the lowest possible interest rate that also offers rewards that align with your spending habits and goals (flights, hotels, rental cars, cashback, etc.)
   
   
2. Get well-acquainted with any and all fees associated with your card. The last thing you want is to get slapped with an unexpected annual fee or some hidden fee they conveniently forgot to mention during signing.


3. Create a budget with clear limits to manage your spending. Analyze your income and expenses to find out exactly how much you can spend on your credit card without going into the red at the end of the month. Use this limit to cap your spending and avoid racking up debt.


4. Pay off your statement balance in full every month, and do so on time to avoid late fees. If for whatever reason you can’t do this, stop spending with your credit card until you can. If you have to, swap your Netflix, Prime, or other subscriptions to another card until you’re caught up.


5. ***Whatever you do, don’t overspend to get rewards. With the crazy high interest rates that credit cards have, it’s simply not worth it. If your statement balance doesn’t say $0.00 at the end of the month, avoid swiping your card like the plague.


6. Keep a watchful eye on your account. Logging in regularly will help you maintain awareness of your financial situation and reign in any excess spending.


7. Consider investing in a debt elimination software like the Money Max Account. These tools can guide you step-by-step on paying off your credit card balance in a fraction of the time.

Put Credit Card Debt in the Rearview With Financial GPS

If you have a looming shadow of credit card debt hanging over you, the time and leg work it takes to pay it off can be overwhelming. It can even be unmanageable for many people with full-time jobs, families, businesses, and other responsibilities.

But imagine if you knew exactly:

1. When you'll have saved enough for your emergency fund.
2. When you'll have all of your credit cards paid off.
3. What each of your account balances will look like next month or three months from now.
4. How your cash flows between each of your accounts.
5. When it’s okay to spend extra or when it's time to hold off.

All without having to do a deep dive into your finances and manually track every dollar coming in and out of your accounts. With this information, you could run what-if scenarios to gauge the impact of:

1. Getting a new car
2. Renting out a room
3. Buying a rental property
4. Going on a big vacation
5. Buying a new house
6. Getting a side job
7. Getting a raise

The Money Max Account debt elimination software gives you this foresight. Think of it like typing an address into your maps app, only the address is one of your major financial goals.

That’s how the Money Max Account works. It takes all of your financial information into consideration—income, expenses, outstanding debts, interest rates, budgetary goals, etc.—and uses advanced financial algorithms to calculate a step-by-step roadmap to get you to your destination.

The difference is, you’ll get there not weeks, not months, but years earlier than you would otherwise.

That’s because, along the way, you’ll receive precise guidance on what debts to pay off, how much, and when, saving thousands in interest payments. All you have to do is follow the directions. No manual budgeting required.

As you bring in income, make purchases, and handle surprise expenses that life throws at you, the system automatically updates your “route” to account for these changes in cash flow. Also, the Money Max Account displays the date you’ll be fully paid off on your dashboard (like the estimated travel time in your maps app), so you can get that extra boost of motivation every time you log in.

If you’re reading this article, your “destination” is likely to be free of credit card debt. But it could also be any of the other items on the above list.

Whatever your financial goals are, the Money Max Account can get you there without all the stress of personal money management, and without forking over ridiculous sums of your hard-earned money to the banks and credit card companies.

You've learned how to make credit cards work for you, and now you know how to take the hassle out of paying off debt.

Find out how much time and money the Money Max Account can save you by filling out the form below. One of our debt elimination experts will reach out to schedule your free savings consultation, where you'll discuss your financial goals, discover how the program works, and find out how soon you can be debt-free.