Use your Credit Card efficiently!

Document created by weronika on May 31, 2016Last modified by on Dec 5, 2016
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I didn't know about how the credit cards work before I've actually started to use mine. Every bank offers different credit card deals (sometimes multiple kinds within the same bank), so pay attention to yours!


Here's what I learned about my card:

-I get 1% cash back for every purchase, 2% if it's groceries, 3% for gas. Because of this, I found myself using my credit card as often as possible, eliminating the need to use my debit card at all. Every few months I check my cash back balance and redeem the money to my bank account. I can redeem it in a few different ways, but if I transfer it to my bank account I get even more extra % from the cash. What a cool way of earning money by spending it!

-Credit card? Debit card? The differences between them used to be confusing to me, but are not anymore. Basically, the DEBIT card is a "key" to my checkings/savings account. I use it in the ATMs to get cash and I show it in the bank branches as a way to proof that I'm the owner of my account. If I pay with in in stores, the money "disappears" directly from my bank account.
On the other hand, using CREDIT card is a little bit like using virtual money. Nothing disappears from my account when I pay with the credit card. Instead, a "minus balance" appears on my credit card's account. I'm taking a debt from the bank. I can check it on my online banking. It's my responsibility to repay my credit card every month. It's very important to do it on time in order to avoid late fees. You can set up an alarm in your phone for it, write it down in your calendar, or your bank can send you reminder e-mails.

-You go to cash register, swipe your credit card, and...oops, error! You try again and again, but it does not work. Suddenly you feel embarrassed... Carry a debit card or cash for such instances! And there's nothing to be embarrassed about, because you've probably done nothing wrong. Sometimes bank blocks your credit card if the fraudulent activity is suspected. It does not mean that the fraud occurred. It's enough that you shopped by a merchant who got hacked, or that you have a similar credit card number as somebody who reported a fraud. To ensure security, the bank would block your credit card to prevent any fraudulent activity, and send you a new card. It will arrive really fast, and you'll usually receive an e-mail about it. So don't panic, check your e-mail and have some credit-card-alternatives in your wallet!

-If you're a traveller, your bank might have an offer of a special credit card for you. You could earn points for traveling (hotels, flights, etc) and use them on future travels. Even if you don't need an extra credit card, you should check in with your bank before you travel internationally. You'll want to know if there will be any fees if you use your current credit card abroad, what is the conversion rate for foreign currency, and if there are any particular ATMs that you could use free of charge or at low cost.


Knowing these tips, my financial life has become easier and I'm currently a self-confident credit card user!