Credit cards, like other financial investment vehicles, have many “secrets” that the average consumer never learns to use – and businesses love it. Indeed; if more people knew about them and took advantage of them; lending as credit as an institution would eventually cease to exist as margins diminished.
Here are some secrets to credit cards to help you better explain your access to the many benefits of these extremely competitive lenders. With just three tips, you will learn how to use credit cards in a way you never thought possible.
Tip 1: Get cards with a reward opportunity
This may seem obvious. But the truth is, too many people get credit cards that have a reward that doesn’t really apply to their lifestyle. After all, if you hate the cold, then what’s the benefit of getting a trip to Moscow as a year-end award?
With that in mind, you get a card featuring frequent flyer miles; make sure you don’t pay cash for things like groceries, shopping or even gas – put it on your card!
Of course, to really take advantage of this offer, you have to avoid the balance – go home and pay for your purchase right away. Then credit card companies don’t take advantage of the interest, but of course they still have to pay off the promised benefits and points.
The fact is; they are only doing so well because most people transfer their credit balances from one month to the next. Every year many people take advantage of it and at the end of the season free trips to all of Europe or Canada and more. With such a disciplined approach, you can really earn frequent flyer miles.
All card companies love it when you have a balance – after all, the way they make money. If everyone followed this advice, businesses would have to close because they went bankrupt and could not finance their operations.
Tip 2: Credit all business-related purchases
This other credit card secret involves a really high level, banker-like knowledge; so we’ll use an example of how to use it. Suppose you want to buy a home repair; housing collapse in the market after 2008 it will be difficult to get a loan.
It’s impossible that lenders are willing to risk hiding money after subprime loans have collapsed, which happened because they sold loans to people who couldn’t repay them.
So what are you doing? Place the repair on your credit card. Even if this card has an APR of 12%, if you borrow about $ 50,000 and hold it for just a couple of months, you actually owe only 2% of the total amount if you repay it.
Of course, in order for this to actually work, you need to do the trimming of the home. In short, you will pay a tiny fraction of the normal amount needed to finance business projects with the required capital.
Tip 3: Use multiple credit lines wisely
If you are like most people, be it probably got some credit cards, right? If so, then take advantage of the competition that exists between bankers to your advantage with this other credit card secret.
First of all; ask your bank if they have a remittance option. If so, make sure your balance transfer is zero percent. For example, if you have a balance on your Capital One card and then you sign up for a Bank of America card, send us an email. Email or call them regarding their balance transfer terms.
If that makes sense, then grab the trigger and move the debt. Plan to pay off completely in the next 6-9 months (usually) to get ahead.
Obviously, if a bank can force you to transfer debt from a tender to your treasury, then they will force you to pay interest on that debt for a long time. This means that in order to sweeten the deal, they often give you a few months without interest on that debt. This literally means giving away money!
So, if you transfer your debt from one lender to another, get a nine-month interest payment and manage to pay off the debt within those nine months, then you’ve actually got a free loan from your new lender.
Use credit cards wisely
In the end, especially with the last “secret”, you can move your debt from one bank to another for several years! You will save several years on the tax equivalent amount, which is large enough if you finally manage to pay off the loan during the grace period. Remember that all credit card companies compete with each other; in the free market, this means that they make the most money by offering the consumer a better deal. Take advantage of that!