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Five Smart Credit Card Strategies

While credit cards are sometimes portrayed as a necessary evil, they also provide a lot of benefits. The key is to know how to use them to your advantage and not to get caught up in the traps that lurk behind the benefits.

Here are five ways to use credit cards to your advantage:

Play the Float

Banks and insurance companies play the float all the time, investing the money you pay for premiums or park in a savings account at 0% interest. You can do that by playing the float yourself, and a credit card is the perfect way to do it. Charge a high-ticket item on your credit card and pay it in full when the bill is due. Time it right and you could get nearly two month's interest free. Find out when your credit card issuer's billing cycle closes (call customer service or check your previous statements) and then make your purchase right after that date. The charge won't appear until next month's bill, and depending upon the length of the grace period, you might luck out with a good healthy float. Note that this strategy does not typically work if you are carrying a balance on your credit card.

Rack Up Rewards

If you want travel rewards, free movie passes, or even cold hard cash, just pull out the plastic. There are rewards to suit just about every interest. The challenge is picking one! If you carry a balance, understand that the interest rate may be higher than what you can get elsewhere. And watch out for strings attached to the rewards, such as minimum purchase requirements, blackout dates for travel, or caps on the amount you can earn. Once you've found a card you like, you may find yourself using it for all your purchases. That can be rewarding - and addictive -so make sure you don't overspend just to earn rewards.

Shop Safely

Credit card purchases are backed with the protection of consumer law. To dispute a billing error on your credit card, you must follow the rules, though. Picking up the phone to complain is not enough! Here's what to do:

* Write to the credit card issuer at the address for "billing inquiries," not the address for sending your payments (the address for billing inquiries is often found on the back of your most recent monthly statement); include your name, address, account number, and a description of the billing error.

* Send your letter so that it reaches the credit card issuer within 60 days after the first bill containing the error was mailed to you.

* Send your letter by certified mail, return receipt requested, so you have proof of what the credit card issuer received. Include copies (not originals) of sales slips or other documents that support your position. Keep a copy of your dispute letter. One warning: billing error protections don't offer help in the case of buyer's remorse.

Build Your Empire

Plastic is usually a lot easier to get than a bank loan, especially for a start-up venture. But that easy credit has its downside. With a large line of credit on your Visa or MasterCard, you may be tempted to spend money on things not essential to your business. If finances charges rack up faster than revenues, you'll soon be in trouble. The better strategy is to start your business on the cheap, and use credit cards only as needed. When you do use plastic, choose a business credit card reported in the name of your business rather than on your personal credit. You'll protect your credit rating from the additional debt and you will be setting up your venture as a serious entity rather than a side hobby.

Save at the Car Rental Counter

Your US$10 a day car rental can easily mushroom into US$30 a day if you buy the "protection" coverage the rental car company will try to sell you at the counter. The "Collision Damage Waiver" is technically not insurance, but it works like insurance in that it covers you if the vehicle you rent is damaged. The good news is that between your own car rental coverage and a CDW waiver benefit on your credit card, you may be able to turn down that pricey policy. You must use the card that offers the coverage when you rent the car, so make sure you carry that card with you when you travel.

News Source : http://www.jamaicaobserver.com/