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:

• 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.