How To Make Credit Cards Work For You

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By Danielle James · May 12, 2021May 11, 2021

When responsibly managed, credit cards are the fastest and simplest way to build a credit history, while also taking advantage of its perks. Not only can you use the card to make purchases when you don’t have cash on hand, you can also use the card for cash advances.

With credit cards, you are billed monthly for your purchases and advances with a pre-determined interest rate that often (but not always) correlates with your credit score. The interest rate, often interchangeably known as the APR (Average Percentage Rate), describes how much interest you’ll pay over a year, if you keep a balance. According to WalletHub’s Landscape Report, the average credit card interest rate is 17.87%. Credit cards can be used to your advantage and upgrade your life in various ways. Credit card companies are working hard to ensure your loyalty with different programs that will either give you perks, cash back features, 0% APR for a specific period of time and more.

Credit card companies do soft pulls (these do not affect your credit score) to see what offers you are eligible for. When you get those credit card offerings in the mail, it’s often because the company has done a soft pull. In order to entice you to open an account (remember: do not have more credit cards than you can afford to pay in debt and always compare offers), there are benefits that come with various cards. Keep reading to discover various credit card benefits and how they can work for your specific lifestyle.

The Jetsetter

Credit cards can hold some serious travel rewards. If you always have a bag packed and ready for your next adventure, you should consider a credit card that will turn your dollar spend into miles. Most airline companies have co-branded credit cards, so if you have an airline that you are loyal to, it would be worth it to look into the co-branded card. Simply for signing up and spending a certain amount in a specific period of time, you can get bonus miles. Some are so high, it equates one (or even two!) round trip flights, depending on where you go. Specific cards will give you points (that equate to miles) on specific purchases like spending money on travel or the grocery store. Different cards also have various perks. For example, Capital One Venture Rewards Credit Card has a rewards rate of 2 miles per dollar on every purchase, every day. The card has an annual fee of $95.00, is offering a $100.00 application fee credit for Global Entry or TSA Pre-check and so it pretty much pays for itself if you don’t have this perk. Not every card has a fee, for example, Capital One VentureOne Rewards Credit Card has a 0 annual fee, but their rewards are a bit lower—only offering 1.25 miles per dollar on every purchase, every day. Do your research and choose what’s best for you.

The Cash Queen

Are you the individual that’s always looking for a deal? A self-proclaimed coupon queen? Then a credit card that offers cash back may be the way to go. Cash back can come in handy, on things you make consistent purchases on (like the grocery store or the gas station). With current offers ranging from 1.5% and up to 6%, every bit really does add up. Pay attention to the fine print to make sure you are getting the best deal. For example, the Discover it Cash Back card offers 5% back on rotating categories, meaning that you get that percentage on a quarterly basis making everyday purchases and specific places like Amazon or restaurants. You have to use PayPal in order to get this benefit and for every other place it’s 1% cash back. Many of the cash back cards also have an annual limit, meaning you can get your cash back percentage on up to $X dollars annually. When you sign up for specific cards, they provide you with a one time cash bonus after you spend a certain amount.

The Red Carpet Queen

You work hard to spend your money, so you deserve to be treated like VIP and have the red carpet rolled out for you. Many cards will have additional perks for their customers and while these often have annual fees, it can often be worth it. For example, if you take a lot of Uber’s, you may want to consider The Platinum Card from American Express. You get $200 Uber credit annually ($15 in Uber cash a month and a $20 bonus in December). This is a luxury card and comes with a $550 annual fee; however, you can recoup the cost in a number of ways via the benefits of the card including a $200 annual airline fee credit, $100 annual credit at Saks ($40 awarded on a semi-annual basis), a complimentary year of Uber Eats Pass ($119 value) and more. American Express also has various shopping offers that give you an opportunity to earn a statement credit on an array of deals—by the end of the year, if you use it right, the card will have paid for itself and then some!