One of the first ways young adults in America get started with credit comes from credit cards. In 2021, nearly 85% of adults had a credit card in the U.S.
By the time they turn 25, almost 75% of Americans have a credit card. Over 160 million credit card users were in the final three months 2022.
With over three-fourths of Americans over 18 possessing at least one credit card, beginners must learn a few credit card hacks.
Let’s take a closer look.
What Are Credit Card Hacks?
A credit card “hack” is a term that means getting the most out of your credit. People with excellent credit use a credit card to pay for what they buy daily, weekly, or monthly.
Others with mid-level credit scores may want to use credit cards to help improve their credit. For example, making monthly payments on time without accruing interest helps.
Young people without any credit might benefit from having a credit card at an early age. It could help later in life when applying for an auto loan or getting a loan for college.
Here are a few credit card hacks to consider.
Don’t Pay Interest Fees
Each credit card comes with interest in the form of an annual percentage rate (APR). America’s average credit card interest rate (as of 2023) hovers around 24.5%.
A simple credit card hack for beginners: Don’t pay any interest. That doesn’t mean you should skip any payments!
Credit cards come with billing cycles. At the end of each cycle, if there’s a remaining balance on your card, you’ll become responsible for paying any interest on top of the principal amount.
Taking at most 30 days to pay any interest causes your credit score to fall.
Try using autopay features via your credit card account or set reminders to pay your balance on time every billing cycle.
Select a Card That Suits Your Budget
Credit cards offer help to consumers in times of emergencies. With credit card hacks, individuals may also select a card with decent cashback rewards.
Different cards offer various rates for rewards and intro offers. An average intro offer might come with a $200 cash rewards bonus for spending $500 in the first three months.
Credit cards with cashback rates range from 1% – 10%. They’ll come with requirements for where you’ll get those rewards:
- Entertainment
- Dining
- Grocery stores
- Gas stations
- Streaming services
- Utilities
- Hotels and rental cars
- Drugstores
- Unlimited cashback on all purchases
With these rewards in mind, you’ll want a card that delivers for you. If you’re an avid traveler, you might prefer cashback rewards when booking your next trip.
Sports fans and online gamblers might do better with an unlimited cashback rewards program. Check out the best credit card casinos that match perfectly with fast deposits.
Avoid Paying Annual Fees
Credit cards might offer 12-month deferments regarding interest, while others don’t require you to pay annual fees. Another credit card hack: Choose a credit card without annual fees.
If you can’t find a suitable option, select a card that offers rewards worth the yearly fee to keep your account open.
It would help if you researched to find a good balance when choosing a card suitable to your budget and spending habits. Consider top banks and credit card companies like Wells Fargo, Citi, Capital One, and MasterCard.
They offer excellent options for credit cards without any annual fees.
Get a Card That Offers Unique Perks
Business travelers may choose a credit card that offers unique rewards. Those cards, however, may come with higher annual fees. The perks might be worth it, though.
Chase and American Express offer cards allowing travelers access to airport business lounges. Lounges provide free Wi-Fi, food, drinks, and showers.
There’s also a Global Entry or free TSA PreCheck for frequent international travelers to get through security faster than regular travelers.
Using a card with unique perks helps to make travel more comfortable and enjoyable.
Use Credit Cards Responsibly
On average, Americans possess at least four credit cards. Finding the most suitable card may include learning about sign-up bonuses and reading the terms and conditions.
To use credit cards responsibly, start with one relevant credit card to where you already shop. Keep a strict budget and follow the same spending habits while earning cashback rewards.
Work your way up to applying for more credit cards that suit you best. Try using autopay features so you don’t miss any payments.
Building credit responsibly is an excellent way to benefit from cashback rewards and other unique perks.
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