Keith Hodges is a personal finance journalist writing news and features for whatismoney.co.uk
Being offered a credit card can be tempting, it can seem like someone has handed you a wad of free cash and that the future will be nothing but bright. However, not using a card properly can prove costly as interest grows and the green grass the card offers slowly turns to a light yellow, dry and brittle replacement. It’s important to sign up for the right credit card and once signed up to use this card efficiently.
Introductory offers are great and often play a big part in choosing which credit card to sign up for. Everyone will have different needs when signing up for a credit card and making the most offers could be hugely beneficial.
Popular offers on credit cards include 0 per cent interest on balance transfers or purchases. Normally a card will offer one or the other, but remember these offers will run out and the interest after the grace period is likely to be higher. Making the most of a credit card here means keeping up with payments and avoiding interest all together.
Cashback is another offer that credit cards are keen to give to customers as it entices spending. To make the most of cashback you need to pay off the credit card fully on a monthly basis to avoid any potential interest payments.
Remember, missing any payments or not making the minimum payments is going to lead to the offer being withdrawn immediately and higher costs being made in the long run.
Finding the right interest rate
Finding a suitable interest rate is essential to making the most of a credit card. If you think you’ll only be making the minimum payment on the card then opt for the smallest rate you can find as this is going to cost les in the long run.
Most interest rates will be a reflection of what is available on the card. For example, a card offering cashback is likely to have a higher interest rate than a standard card.
Paying off your bill
Making the most of a credit card should be done by paying off the bill in full as soon as possible and not being heavily reliant on the card.
For example, paying for a holiday over a couple of months on a credit card can be a great idea to offset the cost of paying out for holiday.
Avoid doing weekly shopping and every spending on the card as this is what is going to build up over time and making paying off the card that little bit more difficult.