Like other financial investment vehicles, credit cards contain many "secrets" that the average consumer never learns to take advantage of – and that companies like. Indeed; if more people knew and used them; loans via credit as an institution would eventually disappear with the reduction of margins.
In what follows, we will discover some credit card secrets to better position you to take advantage of the many round trips of these ultra-competitive lenders. In just three tips, you'll learn how to use credit cards like never before.
Tip 1: Get cards with a beneficial reward option
This may seem obvious. But the truth is that far too many people get credit cards with rewards that do not really apply to their lifestyle. After all, if you hate the cold, what is the point of getting a trip to Moscow as a year-end reward?
With that in mind, when you get a card that provides you with frequent flyer miles; Make sure you do not pay in cash for purchases such as grocery shopping, shopping in department stores or even gasoline: put them on your card!
Of course, to really take advantage of this offer, you must avoid carrying a balance, go to your home and refund the purchase immediately. Second, credit card companies do not take advantage of interest, but must of course pay the rewards and points promised.
The fact is; this only works very well for them as most people postpone their credit balances from one month to the next. Every year, many people take advantage of it and get free trips to Europe or Canada, etc., at the end of the season, for their entire family. You can really earn loyalty miles with this disciplined approach.
All card companies love having a balance on their account – it's after all how they make money. If everyone followed this advice, companies would be forced to close because they would go bankrupt and could not finance their operations.
Tip 2: Put on credit all your business-related purchases
This next credit card secret involves a very high level of knowledge, of the banker type; As such, we will use an example showing how to take advantage of it. Suppose you want to buy repairs on a house. it will be difficult to get a loan on the housing collapse market after 2008.
Lenders do not absolutely want to risk spending money after the collapse of the mortgage at risk, which happened, after all, because they sold loans to them. people who could not pay them back.
So what are you doing? Put the repairs on a credit card. Even though this card has a 12% APR, if you borrow about $ 50,000 and keep it for a few months, you actually only need 2% of the total amount if you pay it back.
Of course, for this to really work, you must be returning houses. In short, you will pay only a tiny fraction of the usual amount needed to finance projects with the necessary capital.
Tip 3: Use multiple lines of credit wisely
If you are like most people, then you have probably several credit cards, right? If that's the case, you can use the competition that exists between bankers to your advantage with this next credit card secret.
First of all; ask your bank if a balance transfer option is available. If that is the case, make sure it is a zero percent balance transfer. For example, if you have a balance on a Capital One card and then sign up for a Bank of America card, send them an email or call them about the terms of their balance transfer offer.
If that sounds logical to you, pull the trigger and move your debt. Plan to pay it back in full in the next 6 to 9 months (usually) to pick up in advance.
Of course, if a bank can transfer your debt from the competition to its own coffers, it forces you to pay the interest on that debt for a long time. This means that, to soften the deal, they often give you several months without interest on that debt. It's literally like giving money!
So, if you transfer your debt from one lender to another, receive a 9-month reprieve on interest payments and manage to pay off your debt during those nine months, then you have actually received a free loan from your new lender.
Judicious use of credit cards
In conclusion, especially with the last "secret", you can move your debt from one bank to another for several years! You will save the equivalent of several years of tax on a large enough amount if you manage to repay the loan on time.
Do not forget that all credit card companies compete with each other; in the free market, this means that they earn the most money by offering the consumer the best deal. Take it to your advantage!