3 Intelligent Ways to Use Credit Cards

3 Intelligent Ways to Use Credit CardsCredit cards are a major instrument we use to make payments. This article discusses 3 Intelligent ways to use credit cards. They are a vital part of your credit score. We will discuss their significance and pitfalls in another article later. Everyone uses credit cards. Their most promoted perk is cashback. However, they have so much more to offer. Here we will focus on how you can take advantage of their other benefits and advantages.

#1 Way to Use Credit Cards Is to Autopay Your Bills

Paying bills online is slowly pushing out the archaic checking system. Virtually no country in the world uses the personal checking system for paying bills. There are a few ways you can make online payments. First is an online payment system, which usually links to accounts by email, phone number etc. Secondly, you can setup a direct deposit, where the recipient takes the money directly from your bank. Lastly, there are your MasterCard and Visa cards.  Although, there is a big difference the way a debit and a credit card are processed.

When you use your debit card, the money is withdrawn directly from your account. This works much like a direct deposit. However, when you use credit card, the money goes from your credit line, not your available cash. There is a big difference. When you make a payment using third party money, then you can utilize the third party as an agent if you need to make a claim. For example, you stop your autopay late in your cycle and the recipient still debits your credit card. At this point, you need to call in a claim.

If you used your debit card, the money is already deducted from your account. The recipient recognizes the extra payment and promises to return your money to your card in 30 days. Since you were smart and used your credit card, you can just call your credit card provider and they will stop the payment. They will verify this with the recipient, but upon the recognition, your credit line will be credited in a few days, not a month.

In addition, you’ll avoid the awkward situation of bank card declination during a busy lunch line for example.

#2 Protect Your Credit Card Information by Using Virtual Numbers

Identity and card number thefts are a big issue today. When you need to make an online payment, you must use a secure portal. That goes without saying. Even in the most secure system, you still need to provide your credit card number. If a hacker breaches the recipients database, then he/she may recover your card number, along with your other personal data. Despite your best efforts and vigilance, once you enter the number, you lose all control.

To avoid this type of data theft, you can use a system your credit provider offers. This system generates and maintains a list of original virtual card numbers for every website, where you make payments. This way you only have one place on the internet with your card number. Minimizing the number of locations or sites is a great way to prevent credit card number theft. It also makes your life easier not to have to remember all the sites you entered your number.

#3 Pay off Your Credit Cards in Full at ASAP

Above all, the smartest thing you can do with a credit card is to keep your credit line at 100%! The more of the credit line you use, the lower your score gets. Credit line is of course not the only credit score indicator, but it is a crucial one. There are several companies that will send you offers for cards with annual fees. If you get these, then your credit line will go up. However, it is not always the best option as the annual fees can be pretty high. But, we(ll discuss this in another post.

Using your credit cards to autopay your bills is a smart thing to do, because it shows movement in your account. Some balance is ok, but the greater the balance, the more interest you pay. Keeping your credit line at 100% is ideal and saves you money. When you get your credit card bill, it states the minimum payment and due date. This minimum payment helps you avoid paying interest on interest. What you won’t find there though, is that you are not limited to only a single payment. You can make as many payments as you like and anytime you like. If for example you do not have enough money to pay the balance in full on its due date, don’t worry. Make the minimum required payment, and simply pay off the  remainder in a week or two, once you get paid.

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