In a perfect world, none of us would use credit cards. We would only use cash or debit cards to pay for things, and we wouldn't spend more than we can afford. While this is definitely an option, using credit cards is a necessity for many people. On this episode, I'm going to cover seven credit card rules to live by so you can utilize them responsibly and to their full potential.

You will want to hear this episode if you are interested in...

• Why you should always make your credit card payment [1:00]
• Automating your monthly credit card payment [3:21]
• Getting your annual fee waived [4:16]
• Lowering your APR [5:16]
• The benefits of keeping your credit accounts open [6:54]
• Increasing your limit for a better credit score [8:47]
• Taking advantage of your credit card’s secret benefits [11:39]

Understanding credit card basics

The first and biggest rule for credit cards is that you have to pay them off regularly. Debt payment represents 35% of your credit score, and it's one of the single most important things you can do to improve it. Even committing to make the minimum payment every month goes a LONG way. Ignoring your credit card bill means asking for a lower credit score and a late fee. Even a single missed payment can drop your credit score by 100 points and raise interest as high as 30%. If you happen to miss your credit card payment, the best thing to do is call your credit card company, make the payment ASAP, and see if there is anything they can do for you. Sometimes they are willing to waive the late fee or forego reporting the mishap on your credit history if you catch it soon enough.

One way to ensure you never miss a payment is to automate your credit card billing. This can be done by contacting your credit card company directly or taking advantage of the online payment services they may offer. That way, if you forget to pay during the holidays or while you’re on vacation, you've at least made the minimum payment to avoid late fees and other credit consequences.

Wait…I can do that with my credit card?

One thing about the credit card industry that many people fail to realize is that it’s customer service based. If you are using your credit cards responsibly, you may be able to reach out to your credit card company for additional perks, benefits, and services. Many credit cards charge an annual fee counterbalanced by its benefits, such as airline points or cash back. But if none of those benefits appeal to you, give your credit card company a call and see if they are willing to waive it. The same goes for lowering your annual interest rate. Threatening to leave a company you have a long and positive history with could open the door to a lower APR.

Aside from the standard perks, there are many hidden benefits to owning a credit card. My favorite is that a lot of cards cover collision insurance when you rent a vehicle instead of paying for additional coverage through the rental company. I’ve even had to use this coverage with my credit card, and it worked out great! Another secret perk for some cards is that they carry trip cancellation insurance. Some credit card companies will cover change fees if your travel plans get shaken up. Listen to this episode for more insight on using credit cards well!

Connect With Morrissey Wealth Management 

www.MorrisseyWealthManagement.com/contact