My Credit Card Tips

Benefits of Multiple Credit Cards

Many people consider the choice of using multiple credit cards as hard to keep track of, others consider multiple credit cards a great way to separate their financial system and their financial choices. Contrary to popular belief, there are indeed many benefits of using multiple credit cards to reduce the chances that you will find yourself facing overwhelming amounts of debt.

Here are some of the benefits of using multiple credit cards:

Costs can Be Separated into Different Credit Card Accounts
When you have two or three different credit cards you can separate costs which can make them easier to repay. For example, one credit card can be used for costs that are associated with a vacation and another credit card can be used to fund childcare for one of your children. This can make keeping track of expenses easy and therefore make the repayment process and keeping track of receipts even easier. Are you constantly trying to budget different parts of the budget, perhaps you should start using different credit cards.

The Consumer can separate Business and Personal Expenses
When you own a home business or a small business, there are many times when the expenses from home and the expenses from the business seem to meld together. Excluding all of the home purchases to a specific credit card and all of the business expenses to a specific credit card can enable the consumer to keep track of all the expenses which are incurred through the home or small business. This can make it easier come the end of the year when the business owner is trying to separate the receipts that were obtained for all of the costs associated with the business.

Costs can be Divided to Protect the Credit Rating
Costs can be divided on to two credit cards to ensure that you stay under the recommended thirty percent of the credit limit. This will ensure that your credit rating does not drop when you are a consumer that is carrying consumer debt on a credit card from month to month. Experts have toyed with other numbers, but have come to the conclusion that maintaining less than thirty percent of the credit limit in a balance is the maximum that should be used in order to preserve the credit rating.

Longstanding Credit Card Accounts can be used to build Credit History
Multiple credit accounts can be used to develop a positive credit history, especially when the credit cards are used to create a positive credit history by making sure that all payments are received on time, and in full – as well as maintaining a balance on the credit card that is under thirty percent of the credit limit.

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Another factor that you need to be aware of is the difference between your currency and that of the country you wish to visit. When you make a purchase in a foreign country, the currency is converted to your own currency and the charges are then applied to your credit card. What seems like a great deal when you are travelling may not be so great if that currency is less than yours. It may actually turn out to be far more expensive than you anticipated.

Cash transactions carry higher interest rates than purchases, even if you buy travellers` cheques with your credit card. There are credit cards available that do not charge for such transactions and only charge the regular interest rate. There is an interest free period on all cards, so if you do use the card to obtain cash, it is best to try to repay that amount before the free period expires. You will have to pay the interest for the full month, even if you repay the amount the very next day.

There are certain things you should take into consideration when you are looking for a suitable credit card to use abroad. Check the interest rate that the company charges. Some companies do have competitive rates for an introductory period. If you plan to repay the amount of money you spend while abroad within that time frame, which is usually six months, then you can save yourself interest charges.

If you know that you will not be in the financial position to repay the outstanding balance of the credit card when you return home, you should look for a card that offers 0% interest on purchases. Then you know that when you do make your monthly payment, the full amount of the payment is going to pay for your purchases and none of it will be used for interest payments.

Even these cards do have a time frame for the 0% interest, so it would be beneficial for you to have the balance paid off before this time runs out. If you need travel insurance or protection against unauthorized use of your card, there are credit card companies that do offer this service in conjunction with the credit card. If you do run up a balance on your credit card while you are abroad, you can save yourself money in the interest charges by transferring the outstanding balance to a 0% credit card when you return home.

One way of getting a trip abroad for free is to use a credit card that offers reward points in the form of air miles. If you use your credit card for all your purchases and then repay the balance when you receive your statement each month, you can let these points accumulate and use them to pay for your flights. You may reap other rewards by using your credit card as well in the form of gift certificates for travel, accommodations or other purchases.

Another way of using a credit card and not have to worry about making payments on the money you spend is to get a prepaid credit card. With this type of card you transfer the money from your savings account or pay some money on the card each month until you have what you need for your trip. Then when you spend money abroad, you are not putting yourself in debt or placing yourself in a position where you will incur interest charges.

Written by Peter