Credit Cards: Be Smart When Using Your Credit Cards

Credit cards are a widely used source of payment for purchases these days. When credit cards are used properly, the convenience of having one or more can outweigh the risks associated with them. The consequences of misusing credit cards can be devastating to your financial well being.

Using a credit card that is best for your needs is an even better option. If you're a frequent traveler, reward credit cards like an airline credit card or a hotel credit card are good options for you, especially if you use the same airline or hotel all the time. Compare Credit cards here.

Any other type of travel credit card is also a good option as long as you select one that will earn reward points that can be used for travel, including free rental cards, free airline flights and free hotel stays. Upgrades for all three travel categories is another popular option.

Cash back credit cards are another popular option if you frequently make large purchases or recurring purchases. Using cash back credit cards for day-to-day purchases like groceries or at gas stations can add up the cash back rewards. Some oil companies offer gas credit cards that allow you to earn up to 5% cash back for gas purchases at their stations.

Last year, I switched from using a debt card to a cash back credit card for day-to-day purchases and racked up a surprising amount of cash! I received the cash towards the end of the year in the form of a credit which made the holidays even better for my family.

Balance transfer credit cards can be a very effective way to minimize monthly credit card interest charges. With especially low interest rates these days, banks are flooding mailboxes with 0% interest rate credit cards or low interest rate credit card introductory offers. If you do a balance transfer on a credit card be sure to mark the date the introductory interest rate changes so you're not surprised one month when the interest charges skyrocket.

Also be aware that balance transfer credit cards have seemingly low balance transfer fees associated with the transfer that may negate true savings.  Read the fine print and look for either a certain a set dollar amount as a limit (along the lines of a 3% fee with a $75 maximum) or if there is not a maximum, do the math to make sure the transfer will actually save you money in the long run.

The type of credit you have will greatly determine the type of credit card and credit card interest rate you are charged. Excellent credit credit cards are only offered to a select few who have credit scores high enough to warrant the low interest rates. The 0% balance transfer cards we mentioned above are offered to these folks.

On the other side of the credit spectrum are credit cards for bad credit. For whatever reason, people who have bad credit scores fall into this category. More and more people are falling into this category thanks to the economy contracting by around 5 percent on average the past couple of quarters and the unemployment rate rising to 9.4 percent.

Choosing the best credit card for your needs is half the part, the other half is managing your credit wisely. Too many people believe they are supplementing their income by using credit cards. This is a very dangerous habit that will get you into trouble when you rack up too much debt and are unable to make the minimum credit card payments, not to mention the interest rate charges you will have to pay.

You can start your credit card search right here using our credit card search engine to compare credit cards. You can search for credit cards by category including low interest credit cards, balance transfer credit cards, cash back credit cards, gas credit cards, student credit cards and more.