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Credit card smarts

If you’re smart about using your credit cards, you can gain loads of benefits and build a good credit score. Here are some things to keep in mind when it comes to charging purchases to your cards.

Woman with credit cards

Many of us get our first credit card in college or university. If you aren’t careful in how you use it, you can easily build up a lot of debt quickly — debt that can take you years to pay off. Don’t fall into this trap; follow these steps for using your credit cards wisely, and you’ll reap benefits for years to come.

Pay your entire balance every month

What’s the point of having a credit card if you pay the entire balance? Well, for one, you’ll gain member benefits. Depending on the type of card, these may be travel points, points redeemable toward products, or extended warranties on purchases, for example. What’s more, you’ll build a healthy credit score, which can help you get loans in the future.

Choose cards with benefits important to you

Don’t sign up for any old credit card. Have a look at the cards on the market, and decide what member benefits are most important to you so you can earn points toward rewards you care about. Got the travel bug? Look for a credit card that offers airline points. Are you a movie buff? Try a card that earns you points for Cineplex Odeon, for example. Would you prefer an annual cash dividend? The CIBC Dividend Card offers exactly that.

Know the details of your cards’ agreements

Take the time to read the fine print of the agreements for the credit cards in your wallet, then use each card accordingly. For example, some credit cards charge a percentage fee when you use them outside your country of residence. So when you travel, make sure to use the card that doesn’t charge a fee or the one that charges the lowest fee of all the credit cards you have. Renting a car? Make sure to charge the rental to the card that offers car insurance as one of its benefits.

Time the use of your card close to its statement closing date

Since payments are due three weeks from the statement closing date, if you can plan to make significant purchases with a credit card just after its statement closing date, you’ll gain a whole month of not having to pay for that purchase. It’s an interest-free loan for a much longer period of time, since you’ve just snuck it past your closing date.

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