How To Play The Credit Game And Win

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While many people fall prey to credit cards by carrying a balance, paying in high interest rates and getting late fee charges, we're going to give a few tips on how to actually win the credit card game.

For those who carry a credit card balance, you have to be extremely careful these days. One late payment could send your APR skyrocketing. But for those who pay their bills in full, credit cards is and always have been a wonderful to earn rewards and benefits. In fact, only by paying your balance in full and FULLY taking advantage of rewards will you ever win the credit card game.  The two primary means of getting something back from your credit card is cash rewards or reward points. I’ve met many friends who pay their credit card bills in full every month. Yet, they carry a typical vanilla Visa or MasterCard that was issued by an obscure bank and also charges an annual fee.

The first thing I say to them is that they are leaving money on the table. If they are willing to pay annual fees, then at least get a good reward credit card where you can earn points that can be converted to various items like airline tickets or gift cards. Another idea I toss to them is to actually get a cash back credit card, where you can actually get a small percentage of the amount that you charge back as cash rebates.

The first question my friends would ask me is how is that possible to earn rebates. Well, credit cards earn their money from either charging annual fees, merchant fees and from interest they charge those who carry a balance. To entice new customers, credit cards give some of their profits back in the form of rewards.

Here are the steps you need to take to win the credit card game.

  • Win by Paying Your Bills in Full: The first in winning the credit card game is to pay your bills in full. If you only pay the minimum required payments, it will take forever to be free of your credit card debt.
  • Win by Earning Reward Points: One you get into the habit of never carrying any credit card debt, the next step is to take advantage of rewards that credit cards offer. The most basic form is to pay customers 1% cash rebates for every dollar that they spend on the card. This is much better than earning nothing. However, due to the competitive nature of the credit card business, issuers are offering better deals. For example, some cards are offering more than 1% rebates if you use your cards to buy certain items. For example, gasoline purchases, supermarket spending, restaurants and travel spending can earn you anywhere from 3% to 5%.
  • Win by Earning Extra Frequent Flier Miles: Then there are also frequent flier credit cards which are credit cards linked to frequent flier programs. You can earn air miles of a particular frequent flier program when you use that card. Hence, it gives the frequent traveler an additional tool to earn extra air miles to help him or her get the coveted free airline ticket. These cards though, tend to come with an annual fee.
  • Win by Taking Advantage of Other Perks: But aside from rewards, the best credit cards have a lot more to offer. They offer things like car rental insurance so that cardholders do not have to pay extra insurance to the rental companies when they rent a car. Many also extend warranties for products you bought with the credit card for longer than the manufacturer’s warranty.
  • Summary: The first things you have to do to win the credit card game is to actually pay your balance in full every month without fail. Better still, set up automatic payments with the credit card company. That way, they have no excuses ever to hit you with a late fee.

Next, you should figure out whether cash rewards or reward points would work better for you. Do some research and pick the right card for yourself.

When you take the above steps, then you win the credit card game. You are using it simply as a convenient tool to pay for your purchases and yet at the same time taking advantage of rewards and cash rebates that the credit cards offer. It is people who carry a balance that do not win the game.

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