The Credit Card you choose could have a huge bearing on your Credit Card portfolio. Here are four incredibly useful tips to optimise your Credit Card portfolio in the best way possible.
Getting a Credit Card is no big deal. In fact, you don’t even have to apply for one these days. If you have a stable job and earn a decent salary, the banks themselves will approach you with Credit Card offers. But, just because you are being offered a Credit Card doesn’t mean that you have to take the first one that comes your way.
However, we aren’t saying no to the prospects of getting a Credit Card. We are just saying ‘no’ to getting the wrong card. There are a number of Credit Card offers out there in the market to suit various lifestyles of people.
You must be wise enough to pick the right card that best meets your lifestyle needs. Choosing the wrong card could cost you a lot more than expected while the right card will save you a lot more than anticipated.
Additional Reading: Get The Right Card For Your Lifestyle
Now wants and needs change with time. Hence, every year, you must lay out all your Credit Cards before you and evaluate the spread. Does your card portfolio need additions and subtractions, or is it good the way it is now? Doing so will help you save on certain costs and even help you earn some great rewards.
So, what tips and tricks should you employ to optimise your Credit Card portfolio? Read on to find out.
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Who Are You?
This isn’t an existential question. We just want you to think about what kind of Credit Card user you are. Are you the responsible type who pays your bills on time or are you the careless one getting by on minimum payments? Be honest. You could even be someone that falls in between. Pays bills and also maintains a balance, depending on the situation. But, how is this important?
If you pay your bills on time then you will benefit the most from a Rewards Credit Card. Each time you pay your bill, you will earn points, which can be redeemed to buy cool goodies. If you are the careless one then you should seek a Credit Card with a low-interest rate.
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Shopping Etiquettes
What are good shopping etiquettes? To scour as many shops as you possibly can before making a purchase. The same is true of Credit Cards. Explore the Credit Card market in depth before you make the purchase.
We said earlier that if you are a responsible Credit Card user then go for a rewards card. However, there are a ton of rewards cards available in the market. You can get rewards in the form of cashback, points, miles etc.
See which reward appeals to your lifestyle the most. It’s common practice to offer bonuses and joining benefits to people signing up for a rewards program. Keep an eye out for these bonus plans as well.
Now, on to the careless one. You miss your payments every other month and often get away with paying the minimum amount due. This is exactly why low-interest cards are definitely for you.
Take rewards or any other kind of card and you’ll find yourself in a lot of trouble. Firstly, you won’t be able to maximise the rewards due to your inability to pay your dues in full. Secondly, the interest building on your outstanding amount could be paralysing financially.
So, stick to a low-interest Credit Card. Even with low-interest Credit Cards, there are two scenarios. If you are reeling from Credit Card debt then look for a balance transfer Credit Card that comes with zero percent interest rate for the longest period of time.
Be wise and clear your debt within that time period. While the interest rate is important, you must also look out for balance transfer fees. Often, banks compensate for zero interest by charging a high balance transfer fee. So, when you make the jump from one Credit Card to another, look for the optimum combination of low interest and low transfer fee.
In short, always evaluate your priorities before you make a pick.
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The Black Sheep Of The Family
Credit Cards are of a fleeting nature. Hence, you must be ready to let the old ones go and let new ones enter your life. But Credit Cards won’t go away on their own. You have to send them away. How do you do this?
Take stock of all your Credit Cards and zero in on the one you dislike the most. It’s probably the one with a high-interest rate and offers you little in terms of benefits no matter how much you use it.
But, what will happen if you close your Credit Card account? Nothing! Just be sure to clear your dues. Cancelling your Credit Card doesn’t affect your Credit Score if that’s what you wanted to know. Moreover, you are getting a new card for letting your old card go, so chill!
Now, when you are cancelling your card, you will be subjected to all kinds of pleas from your banker. Listen to them, but do not give in. Only if they are willing to cut you an amazing deal should you consider. But again, the new deal should beat all the offers that you are looking to find in your new Credit Card soulmate.
Additional Reading: A Guide For The Safe Cancellation Of Your Credit Card
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New Addition To The Family
With the old ones gone, new Credit Cards need to fill the empty card slots in your wallet. Now don’t go applying for too many Credit Cards all at once. Applying for too many Credit Cards at the same time will kill your Credit Score.
If you want to get more than one card, allow for a few months to pass by between each application. There is no limit to the number of Credit Cards you can hold. But be wise. Have only as many as you can service. You shouldn’t find yourself maxing out all your cards and then hitting your head against a wall. You need to pay your dues on time. Got it?
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Optimising your Credit Card portfolio is not a one-time process. It needs to be revisited from time to time. Meanwhile, it’s important that you keep checking your Credit Card statement for changes in the interest rate and other charges.
Also, bear in mind that Credit Card issuers offer great offers to new Credit Card applicants. Why shouldn’t you take advantage of them, right? So why delay? Start looking for the right Credit Card right away.