When utilized properly, a credit card can be an excellent tool for managing your monthly expenses. You can effectively use your credit cards to charge all of your purchases and bills to streamline and thus make your life easier. When they are used correctly, charging everything on your credit cards can save you a lot of time while helping you maximize your credit card’s rewards program.
Establishing A Budget
The first step to using your credit card for all your monthly charges and expenses is to correctly setting up a monthly budget. When you set spending limits for yourself, then you can be sure that you’re not charging more on your credit card than you are able to pay off at the end of the month. First, start with all your set monthly bills and expenses such as: (mortgage payments, utilities, car loan etc), then add all your set variable monthly costs such as(gas, food, entertainment, etc), and then compare these totals with your monthly income to establish a spending limit in each area. Most credit cards will allow you online access to help you keep an eye on your purchases on a daily basis.
Credit Card Payments
If at all possible, set your bills and expenses up so that they automatically charge your credit card each month. Keep in mind that it’s not possible to charge each and every expense and item on your card, but take advantage of this as much as possible. When you are choosing a credit card, make sure the card is accepted by the stores you usually shop.
Ease Your Record Keeping
Putting all your purchases on your credit card makes record keeping easier. Instead of having a lot of transactions to record in your checking book throughout the month, you can now only have just the one check that you write to pay off your monthly credit card balance. This makes it much easier to balance your bank balance and checkbook.
Your bank statement keeps a record of every transaction that has occurred in your account during the month. So when paying for as many expenses as you can on your credit card, you are thus reducing the number of bank transactions that appear on your statement. The lower number of transactions makes it easy to compare it with your checkbook. Doing this will save you a lot of time, and also reduces any margin of error in your bank records by making it easier to spot mistakes.
Maximize Your Credit Card Rewards Program
Putting your expenses on a credit card that has a ‘rewards program’ allows you to receive the maximum benefits offered by these programs. Obviously the more that you charge to the credit card, the more rewards you will earn. Say for example, you have a card that features a “Cash Back” reward program which pays 1 or 2% for each qualified purchase. If you set your budget for monthly expenditures at $2,000.00, and if you use your ‘rewards’ credit card to pay for all of them, you will earn a free $20 to $40 per month. That totals to an extra $240 to $480 each year, just for smartly using of your credit card. Don’t forget there are other rewards programs, such as travel rewards or store rewards. When choosing a credit card that offers a rewards program, chose one that will be most advantageous to you or your family.
Here Are Some Things To Keep In Mind
Pay attention to the credit card fees, their grace periods and interest rates when you are choosing a card. Make sure that the benefits of charging everything on the credit card outweigh these costs. Also, you staying within your pre-set budget limitations is the key to the success of this approach. You must also pay off your credit card in full each month in order for any of these advantages to work and be worthwhile.
Paying all your monthly expenditures and expenses with your credit card can make things a lot more simpler while helping you leverage your credit card rewards program. Choose a credit card wisely by comparing hidden fees, interest rates, and the rewards programs. Establish a set budget, set up your payments to be charged to your card, and make sure you stay within your limits. You will then start to see the benefits of using credit cards.