Credit is a powerful tool if you use it correctly. It can help you buy a new car or close on your dream home. 63 percent of Millennials (ages 18 to 29) don’t have a credit card, according to a survey commissioned by Bankrate, while comparatively, only 35 percent of adults 30 and over don’t have credit cards. This hesitancy to choose plastic could be due in large part to the financial crisis of 2008 and the front-row seat we had to our parents’ financial obstacles.
The good news is that you can use incentives provided by credit card companies to your advantage! Credit card companies are facing an oversaturated and competitive market and are vying with each other to get a piece of the $200 billion in annual Millennial buying power.
Remember to pay your credit card balance off in full each month to avoid interest and use the following perks to your advantage:
- Earn Cash Back rewards: Cards like the Chase Freedom Unlimited and Blue Cash Preferred card from American Express offer cash back rates of 1%-6% depending where you spend with amount varying between supermarkets, gas stations, or department stores. Your normal everyday purchases can quickly add up to more money in your pocket.
- Earn points: Points earned towards travel and gas can be used for airline tickets and road trips. With the Capital One Venture Rewards card, for example, you can earn 2 miles per $1 spent which can be redeemed against airlines and even hotels. That vacation just got a little less expensive!
Always remember that if it seems too good to be true – it usually is. Don’t fall for the gimmicks credit cards companies use to lure you in – make sure to read the fine print and check for annual fees and balance transfer fees. Use credit wisely and you will be earning points in no time.
How do you use credit cards to your advantage? What are your favorite credit cards to earn rewards? Let me know in the comments below.