Beating the Credit Card Companies at Their Own Game
Visa, MasterCard, Discover, and all the other credit and charge card
companies only make money if you do not pay their full balance each month. The
only exception besides the occasional emergency or lack of cash for not paying
your credit card off each month is if you are trying to build credit.
Some people advise against having more than one credit card saying that you are
destined to build credit card debt. This is simply not true. There is nothing
wrong with having two, five, or even ten credit cards as long as you pay the
full balance each month and have limits that match your income. Whether you can
handle more than one card relates to your personal control and spending habits.
If you can handle it, each of your credit cards can be earning you rewards, but
you have to be diligent in paying their balance.
There are many ways to ensure you will be able to pay your full credit card
balance. You can keep a running tally in your head or on paper of credit card
expenses, but the best way is to find credit cards that allow you to track your
purchases online. If you think you will have trouble with overspending then
limiting yourself to one card makes sense and you might want to consider a low
limit credit card or stick with a debit card.
The point is that temporary credit card debt is not your enemy. In fact, if you
pay your full balance each month you are profiting off the credit card
companies! Inflation averages 3.5%, which is .3% monthly. That means if you put
$1000 a month on a credit card and pay it back at the end of the month you are
making $3 off the credit card companies! Oh yeah!
Okay, so $3 is a small win in a giant war, but that’s why you apply for the
credit cards that have reward systems. When you pay your monthly balance in full
you essentially get rewards for free! That way, your credit cards earn you
frequent flyer miles, gas bonuses, cash back, and other rewards so that you can
spend money on what really counts, booze.
Apply for Credit Cards with the Most Rewards
For a college student credit cards can be a great way to save money if you find
the right credit card with the right rewards. When you consider applying for a
credit card there are three types of rewards to look for:
CollegePlastic.com constantly updates its list of college student friendly
credit cards that earn the most rewards.
- Frequent Flyer Miles– With every dollar you spend your credit card rewards you
with frequent flyer miles. This is great for college students who are long
distances from home. For example, if you pay your tuition on a credit card it
can earn enough frequent flyer miles to fly back home for the holidays!
Free Gas– High gas prices have become a large expense for college students and
some credit cards can help by earning you free gas. Automobile and gasoline
credit cards earn rewards with each dollar spent saving you money on daily
driving costs and even more on Spring Break road trips. You can get up to a 5%
rebate on purchases at supermarkets, gas stations, and other stores that can go
towards more road trips.
- Cash Back- Some credit cards offer cashback, which means exactly what it
sounds like. Every time you spend a dollar, you earn a point that can be
redeemed as cash, gift certificates, or travel and places you already spend
money such as Blockbuster, The Sharper Image, Gap, Foot Locker, the Hyatt, and
more. This option makes all those pizzas on your credit card pay for video
rentals, books, or even a cruise and hotel stay.