6 ways to use your credit card wisely

Wherever you are – at a festival, at the new local bistro or on a trip to the other side of the ocean – the credit card can be a practical and advantageous tool, in addition to saving you a lot of hassle. , provided you use it wisely. Here are six ways to take advantage of it.

1. Have access to a payday loan if you don’t have a line of credit

A line of credit can be used as emergency fund  . However, this form of credit is not available to everyone. If you don’t have access to it, the credit card can help you out. However, since the interest rate charged on the unpaid balance of a credit card is higher than that of a line of credit, it is important to use it brilliantly and in moderation.

2. Shop more easily

Without a credit card, it is almost impossible to book a plane ticket  online or to make purchases of all kinds on the Web. Although it is possible to pay using platforms such as PayPal by linking your bank account to it, this method of payment is not accepted everywhere.

In some situations, it is more convenient and faster to pay with a credit card, because you don’t have to drag your wallet and cash around with you. Paying with a credit card when visiting a festival, fair, or pop-up store, for example, allows you to take advantage of  mobile and electronic payment technology  without having to handle cash, in addition to reducing shopping time. waiting in lines to pay (if only everyone paid by card!).

Even today, some businesses, such as restaurants, cafes, hotels and car or bicycle rental companies, require a credit card in order to be able to pay the charges. Many of them no longer accept cash payment.

3. Take advantage of loyalty programs

If your credit card gives you access to bonus points, travel discounts and other benefits, such as cash back, it can become advantageous to use it. If your credit card does not offer these benefits, then you’re missing out. Go online right now and compare credit cards with incentives. However, you must use it enough before benefiting from it, while ensuring that you regularly make the payments associated with it. It should also avoid dragging an unpaid balance, because the amount of interest could quickly nullify the advantages linked to the card. Here’s a trick to make the most of your credit card: deposit an amount on it, then use it to make all your expenses. This way, you’ll accumulate bonus points and eligible expenses for cashback faster, and enjoy the benefits of your card without going into unnecessary debt or compromising your credit report..

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4. Combine your purchases and bills to make a single payment

Managing finances and accounts payable – cell phone, rent, streaming service subscription, etc. – can quickly become complicated. Your credit card can simplify this task: by paying for all your purchases with your credit card, such as paying your monthly gym membership or your electricity bill using direct debit, you only have a single payment to be made on your credit card, once a month, instead of paying several accounts and invoices one by one.

5. Better control your expenses

Planning a budget  and regularly monitoring your expenses are strategies for controlling your cash inflows and outflows. When you pay cash, it’s easier to overlook expenses. When using your credit card to make purchases, you can view your expenses using your online statement , a valuable tool for understanding where your money is going. In addition, the statements often indicate the type of expenses entered, which makes it easier to calculate the total of your expenses according to their nature.

6. Build a credit file

When lending you money, financial institutions and lenders consult your credit file  to assess your ability to repay and they analyze your file before confirming the amount of your loan. The better your record, the easier it will be for you to borrow, and at a better interest rate. If you haven’t yet made any major expenditures or major investments, such as buying a home  or joining a Registered Retirement Savings Plan (RRSP) , so you have no credit history or credit score. To build a credit file and demonstrate your reliability, the credit card is an excellent way. If you have a credit card and use it responsibly, you’ve laid the foundation for a good credit score.

A tip from our expert

There are good ways to use a credit card and there are bad ones. “You should never pay a credit card using another credit card. And if you have trouble managing your compulsive spending, leave your credit card at home,” recommends Samya Namir, SME Director at National Bank.