Guide to Credit Cards: Four Steps To Getting The Most Out Of Your Credit Cards
We've seen that credit cards are a tug of war between credit card companies and consumers. At one end of the rope: the credit card companies. They want to make as much money as possible. They do that by encouraging consumers to overspend using their credit cards and to borrow money at steep interest rates. They also make money from penalty fees, such as late payment fees and fees for exceeding your credit limit.
At the other end of the rope is you, the consumer. You have the opposite interests. If you need to borrow money, you should be doing so at the lowest possible interest rate. That means never borrowing from a credit card company. You also want to avoid paying late fees, credit limit fees and any other penalty fees. And you don't want to be lulled into spending more than you can afford.
You also want to benefit from your credit cards as much as possible. You're delighted if the credit card companies shower you with benefits for spending money you would have spent anyway. And you're happy for them to lend you money at a zero percent interest rate.
How do you win this tug of war with the credit card companies? Answer: you follow four steps to getting the most out of your credit cards:
STEP ONE: Never borrow money from credit cards.
STEP TWO: Never pay credit card fees - late payment fees, balance transfer fees, or fees for exceeding your credit limit.
STEP THREE: Don't be tempted into overspending.
STEP FOUR: Get the best benefits you can from using credit cards.
It sounds easier said than done. So in the coming sections we're going to see exactly how you can implement these four steps.
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