Credit cards are an integral part of managing personal finances. They give us flexibility to spend our money on anything from groceries to travel tickets and offer rewards programs that incentivize saving and spending. However, they also come with their fair share of pitfalls. A credit card has become a necessary tool in today’s economy. In fact, over 90% of Americans carry at least one kind of plastic when shopping or traveling. The average American carries four different types of credit cards, which means they hold $15K worth of debt. Here are 12 ways to use credit cards effectively.

Get the Best Deal

The best way to get the most out of your credit card is to compare interest rates among all the major issuers before applying for any new one. There are sites like Bankrate.com that will help you do this.These sites will help you in keeping check with your finances .

Use Cash Back Rewards Programs                                                                                         

Cash back rewards programs are a great way to build up savings by combining your cash back rewards with your bank account. Many companies allow you to earn 1-2% back on purchases made through their site, while others may have even more generous benefits. Check out the latest offers at Consumer Reports Money Center.

Pay Off Your Balance Every Month

Pay off your balance each month so that you avoid incurring additional fees or interest charges. This makes it easy to pay off your entire balance every month. And if you don’t, you’ll be charged late fees and higher interest rates.

Keep Up With Payments

If you’re using multiple cards throughout the year, make sure you stay on top of payments and keep them current. If you let balances go unpaid, some issuers can raise your interest rate after a certain amount of time passes. It’s better to keep your outstanding balance low than risk being hit with extra fees and interest charges.

Make Sure You Can Afford Repayment

Before applying for a new credit card, consider whether you can afford to repay the full balance should something happen to your job or income. When applying for a new credit line, always include a copy of your last 3 months’ combined monthly income (from work and other sources). While there’s no harm in having too much available credit, if you’ve got too little to begin with — say less than 30% of your total monthly take home pay -, then there’s a possibility that you won’t be able to repay the bill should things change.

Don’t Fall Victim to Fraudulent Charges

Be wary of emails offering free shipping or other incentives that seem too good to be true. Never open attachments unless you know where the email came from, and never click links in emails without verifying their validity first. Learn about phishing scams here.

Monitor Your Spending

Monitoring your spending is critical in order to control costs. Find out how much you spent on each category of expenses — such as food, entertainment, transportation, housing, etc. — and try to cut down on unnecessary spending. Remember that small changes in your daily habits add up to big savings.

Limit Purchases

Use credit cards for only the purchases that you need. Avoid impulse buys – buy only what you actually need. Also, look into getting a debit card instead of a credit card. Debit cards limit your ability to incur large debts, but they still give you access to funds when needed.

Understand Terms & Fees

Take the time to understand all terms and fees associated with your credit card before signing on the dotted line. Read over the fine print carefully. Certain fees aren’t obvious until you get closer to paying off the account, which adds stress to an already complicated process.

Get Involved

There are plenty of ways you can help keep your credit score high, including maintaining a healthy credit utilization ratio. A lower ratio means fewer unsecured lines of credit and therefore, a healthier score. By taking steps like these, you can also ensure that your credit remains protected in case of any unforeseen circumstances in your finances.

The Bottom Line .

Keep your credit card use in check by following these tips to avoid negative consequences later on. The more responsible you are now, the easier it will be to manage your finances in the future.And if you manage to manage your finances very well and you have change to spare we encourage you to tryout online casino games.