We all know someone who is a true master of using his credit card: he goes on a trip, does shopping or eats at restaurants while we wonder, how does he do it?
Well, in this blog we tell you how.
The first thing you have to know is that the key to getting the most out of your credit card is to always pay your card on time.
As you well know, “plastic money” is not additional money and therefore before using it you must manage your budget well. And the “card masters” are masters at managing your personal finances, too.
(If it works for you, we invite you to download this worksheet to plan your monthly expenses ).
With the simple habit of always paying your account statement on time, you transform your plastic into a great ally to improve your consumer experience.
The ultimate goal, beyond actually paying less for various experiences and products, is to extract all the value that your card offers. This is what this article is about.
Read on for these tips to get the most out of your credit card.
1. Take advantage of discounts at associated businesses
All credit cards have a network of associated businesses that offer discounts and promotions for using them at their premises.
Generally there are specific promotions depending on the day of the week, such as discounts on perfumes or 2×1 on children’s shoes for example.
The most common categories are entertainment, restaurants, travel, and fashion.
Each bank operates with a more or less exclusive network of associated businesses. This information is generally available on the bank’s website. Some others have an app to see credit card discounts and promotions.
In this sense, having two credit cards can be beneficial.
First, because you will be expanding the network of associated businesses that you can access.
Second, because some cards offer greater discounts than others. Therefore, you can pay with the most beneficial or choose which items to pay with which card.
I want to put together my expense template now
2. Always use three interest-free installments
The Definite recommends this principle with one of the golden rules of credit card use.
The grace is that it gives us time to pay for things that we cannot buy in a single payment.
However, this varies by bank and some offer up to six months interest-free. In any case, many businesses are adhered to give you 3 interest-free installments without having the current bank promotion, take advantage of them.
The Definite recommends reviewing the Annual Equivalent Charge (CAE) and the Total Equivalent Cost (CTC), to be clear about the total amount you will pay for your purchases.
3. Use the points on your card
We all know someone who is a true expert in accumulating points with his credit card.
And they are right, because the grace is that the points allow you to pay from experiences – such as travel or hotels – to all kinds of items, give gifts or obtain cashback.
Your points are freely available, so you can do whatever you want with them, even make donations.
This is how your bank rewards and encourages you to use the card.
The first thing is to know the rewards program of your card, because each bank has its own scheme to differentiate itself from the competition.
The key is to use your card constantly to accumulate points.
A good way to do this – which requires A LOT of discipline and responsibility – is to pay EVERYTHING, from candy to your department dividend, with your credit card.
The higher the amount, the more points you accumulate. At the end of the month, you pay the ENTIRE account statement from your checking account.
4. Cashback or cash refunds
A “cashback” rewards program is an incentive offered by credit card operators.
Under this type of program, a percentage of the net expense of the card (purchases minus refunds) is returned to the cardholder as an annual, monthly or campaign refund, in the form of a credit to their Credit Card reflected in their balance.
Products like cashback are more beneficial for consumers who pay their entire statement each month.
BONUS: Combine your card with a term deposit
This is an advanced technique that, again, requires a lot of discipline to produce benefits.
Above we recommend that you pay all your expenses with your credit card.
Why not put your salary deposited in your checking account to work in the meantime?
The way to do this is to put your salary in a renewable fixed-term deposit while you use your card, and make money transfers once a month to pay your balance.
Short-term deposits range from 7 to 90 days. If you have money to cover 60 days so much the better. Leave an amount in your checking account for emergencies and deposit the rest in time.
While your money is deposited generate interest, so you can stay with the difference once you make the turn to pay your statement.
All these tips are intended to help you use your credit card wisely as a tool that helps the tool that helps family budget
We can’t help reiterating that being disciplined – always paying your card before the expiration date – is mandatory for these tips to work for you.
Many of us associate credit cards with debt, but if you use it well you can get a higher value than what you pay using it.
With responsibility and consistency, you too can be an expert in the use of your credit card.