The keys to credit card use are using them responsibly, knowing what you are spending, and, if you can, getting your credit cards to work for you to keep your spending in check.
If you are like most people, you are struggling to get by from month to month. It seems as soon as a check comes in, it goes back out again to pay the bills. The only way to get out of that cycle is to take a deep look at how you are spending and making money and make changes to allow you to get ahead.
Know Your Expenses
The first thing that you have to get your hands around is the amount of money that you are spending on a regularly monthly basis. It’s time to pull out those Credit Card bills for the last few months. If you haven’t kept track of them, most credit card companies have these online.
You also need to make a list of your other monthly expenses to know how much money you are sending out the door on a monthly basis.
Know Your Income
Now you need to take a note of the money you have coming in each month. This means the money you will actually have available to spend on your bills and other expenses, after taxes and any other withdrawals are taken out.
Making the Numbers Work
Once you have these two lists, you need to see how you can make them work. If you are spending more than you are making, you are going to get into major financial trouble, and fast. You need to find ways to lessen the amount you are spending each month so you can pay down your debt, not get deeper into it. This is when many people sit down and make a budget to sort out all of their payments.
Know How Your Credit Card Can Help
Believe it or not, a credit card can help in this time. There are many reward credit cards on the market that can help you get things you want, or would spend on anyways, for free or reduced prices.
Cash Back Credit Cards – These are cards that literally send you a check for cash back on your expenses. This often varies from 1-5% depending on the types of spending you have been doing.
Air Miles Credit Cards – If you travel at least once a year and usually have to pay full price for the tickets, an air miles credit card can help you save money by allowing you to earn miles for each dollar spent and then cash those miles in on free airline tickets.
Travel Rebate Credit Cards – Even if you don’t go by air, many travel rewards credit cards offer rebates towards hotel stays, car rentals and other travel related expenses.
Gift Certificate Rewards Credit Cards – While cash back credit cards are great, some cards offer you more for your money if you are willing to get gift certificates or gift cards. If they have stores you are already going to use in their inventory, why not get more back for your dollar.
Discount offering credit cards – Many credit card companies offer partner discounts, with stores and businesses they work with. Check to see if your card company offers these types of discounts for any of the businesses you regularly use.