Here are seven ways to make sure your credit cards work for you, not against you.
1 Take advantage of zero-percent installment promotion. Most personal credit card issuers offer zero-percent installment promotions, allowing you to buy high-ticket items at no interest and payable in 6, 9, or 12 months. Take advantage of this facility to acquire office computers, cell phones, other gadgets, and office furniture.
2 Use the continuous billing facility. Most credit cards offers a plan for cardholders to enroll their utilities and other accounts- electricity charges, telephone bills, insurance, and others for continuous
billing, charging and payment. This frees your hassle of having to monitor several due dates, and getting your services disconnected by your service providers if you miss a deadline. With the continuous billing facility, you have to remember only one date, that of your credit card.
3 Pay the total amount due on or before the due date. The regular credit card has a facility that allows a cardholder three options to pay his credit card bill-pay the total amount due(TAD), pay the maximum amount due (MAD), or pay an amount more than the MAD but less than the TAD. In all instances, you must make the payment on or before the due date stated in the statement of account (SOA) for you to stay in current status. If you pay an amount that is less than the TAD, you would be considered a borrower and therefore, would be charged an interest ranging from 2.5 to 3.75 percent a month, depending on the credit card issuer. In addition, if you pay after the due date stated in your SOA, a late payment fee would be charged.
4 Maximize the float period. Take note of the cut-off day of your credit card so that you could time your purchases and achieve better cash flow. Let's say your credit card's cut-off date is the 31st of every month. This means that your purchases for the period of January 1 to 31, for instance, would be reflected on your SOA for January 31. The payment due date is ussually 21 days after the cut off date. This means that you have until February 21 to pay your bill.
The number of days from the time you made the purchase to the time you paid it is called the float period.
To continue the above example, a purchase made on January 30 would be reflected on your January 31 SOA, and you need to pay it on or before February 21, giving you a float period of 22 days. However, if you wait for two more days or until February 1, before making the purchase, it would only appear in your February 28 SOA. You would then have until March 21 to pay for the purchase, or a float period of 47 days.
5 Ask for a waiver of fees, or an increase in the credit limit. Credit card issuers charge annual fees to cover their operational costs in servicing cardholders. However, in some instances, they may consider waiving the annual fees on your account if you are a good payer, if you have been a long-time cardholder, or if you frequently use your card.
6 You can use your credit card for operational expenses of your business. You may use your credit card for operational expenses such as utilities, gasoline, representation, office supplies and vehicle repairs, as long as you are a diligent payer. You credit card billing statement can then serve as a tool to analyze your expenses and cash flow requirements.
7 Use the cash advance or cash loan facility only after careful study. A regular feature of a personal credit card is the cash advance facility. However, when getting cash advance, you will be charged an upfront cash advance fee ranging from 3 to 6 percent of the cash advance amount, or a fixed amount, whichever is higher.
Credit card issuers also offer cash loans-you are given cash that must be paid back in equal monthly installments, ranging from from 3 to 24 months with add-on interest.
Since these facilities involve fees and interest charges, carefully assess your situation before using them. If you have several credit cards, compare their rates and terms so that you could choose the most advantageous for you.
Source: Entrepreneur Magazine
1 Take advantage of zero-percent installment promotion. Most personal credit card issuers offer zero-percent installment promotions, allowing you to buy high-ticket items at no interest and payable in 6, 9, or 12 months. Take advantage of this facility to acquire office computers, cell phones, other gadgets, and office furniture.2 Use the continuous billing facility. Most credit cards offers a plan for cardholders to enroll their utilities and other accounts- electricity charges, telephone bills, insurance, and others for continuous
billing, charging and payment. This frees your hassle of having to monitor several due dates, and getting your services disconnected by your service providers if you miss a deadline. With the continuous billing facility, you have to remember only one date, that of your credit card.
3 Pay the total amount due on or before the due date. The regular credit card has a facility that allows a cardholder three options to pay his credit card bill-pay the total amount due(TAD), pay the maximum amount due (MAD), or pay an amount more than the MAD but less than the TAD. In all instances, you must make the payment on or before the due date stated in the statement of account (SOA) for you to stay in current status. If you pay an amount that is less than the TAD, you would be considered a borrower and therefore, would be charged an interest ranging from 2.5 to 3.75 percent a month, depending on the credit card issuer. In addition, if you pay after the due date stated in your SOA, a late payment fee would be charged.
The number of days from the time you made the purchase to the time you paid it is called the float period.
To continue the above example, a purchase made on January 30 would be reflected on your January 31 SOA, and you need to pay it on or before February 21, giving you a float period of 22 days. However, if you wait for two more days or until February 1, before making the purchase, it would only appear in your February 28 SOA. You would then have until March 21 to pay for the purchase, or a float period of 47 days.
5 Ask for a waiver of fees, or an increase in the credit limit. Credit card issuers charge annual fees to cover their operational costs in servicing cardholders. However, in some instances, they may consider waiving the annual fees on your account if you are a good payer, if you have been a long-time cardholder, or if you frequently use your card.
6 You can use your credit card for operational expenses of your business. You may use your credit card for operational expenses such as utilities, gasoline, representation, office supplies and vehicle repairs, as long as you are a diligent payer. You credit card billing statement can then serve as a tool to analyze your expenses and cash flow requirements.
7 Use the cash advance or cash loan facility only after careful study. A regular feature of a personal credit card is the cash advance facility. However, when getting cash advance, you will be charged an upfront cash advance fee ranging from 3 to 6 percent of the cash advance amount, or a fixed amount, whichever is higher.
Credit card issuers also offer cash loans-you are given cash that must be paid back in equal monthly installments, ranging from from 3 to 24 months with add-on interest.
Since these facilities involve fees and interest charges, carefully assess your situation before using them. If you have several credit cards, compare their rates and terms so that you could choose the most advantageous for you.
Source: Entrepreneur Magazine
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