Credit cards let you borrow flexibly and repay at your leisure. Billing cycles last around 30 days, and then you get a grace period of approximately 30 days to pay your bill. You can stay in good standing as long as you make the minimum monthly payment. Therefore, you can delay payments for up to around 60 days. Plus, many credit cards earn points redeemable for cash. These features can dramatically boost your purchasing power.

However, using your cards wisely is critical to maximizing your purchasing power. This article will dive into a few tips for using your credit card wisely to reap the most benefits.

1. Use your card for everyday expenses

The best way to use your credit card is to maintain your spending habits but use the card instead of cash or a debit card. This lets you accumulate cash back on typical purchases, such as gas and groceries. You can then redeem these rewards monthly for cash or a statement credit, effectively earning you a discount on your regular spending.

Furthermore, some card companies increase the value of your cash back rewards when shopping online through their rewards portal. This is another way to expand your purchasing power on purchases you would have made anyways.

2. Don’t live above your means

Credit cards let you delay payments and earn cash back, boosting purchasing power and saving you money. However, it’s important to avoid putting too much on your card. Carrying a balance on your credit card causes interest to accrue and add to your balance. This interest quickly outweighs any rewards and expansion of purchasing power. Continue to live below your means while using your card in order to get the most out of it.

3. Take advantage of introductory offers

Many credit cards come with introductory offers, such as:

  • Welcome bonuses: Earn a large cash back reward for spending an amount of money within a period after opening the card. For example, some cards may let you earn $150 after spending $2,000 within three months of opening your account.
  • Introductory purchase APRs: Pay 0% interest on purchases made with the new card for an extended period, usually 12 months or more.
  • Introductory balance transfer APRs: Pay 0% interest on balances transferred to the card for a long period, usually 12 months or more. You may have to cover a fee for the balance transfer.

You can take advantage of the card’s welcome bonus by using it for larger purchases, such as furniture. Making a large purchase can help you instantly earn the welcome bonus, saving you a few hundred dollars immediately. Then, if the card has a 0% introductory purchase APR, you can spread the remainder of the purchase across a year or longer without interest. Additionally, balance transfers can help you consolidate and refinance debt onto one card with 0% interest. Doing so can simplify your repayment and save you on interest.

Offers can vary between cards. Look at a Canadian credit card comparison for the best welcome bonuses available. Then, apply for a credit card online when you find the best one so you can use that bonus as soon as possible.

The bottom line

Credit cards can stretch your budget much further, thanks to the ability to delay payments and earn rewards on purchases. However, you must use your card wisely to get the most out of it without the downsides.

Use your cards on regular expenses, such as gas and groceries, to save money on purchases you have to make regardless. Don’t live above your means, and take advantage of introductory offers when making larger purchases. Following these tips will help you avoid interest and rack up more rewards.

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