Using Department Store and Gas Credit Cards to Your Advantage, Not Disadvantage – Top 3 Tips

Department store and gas credit cards are amazing for a host of reasons, ranging from convenience of payments to rewards and loyalty points when you use them for the utilities that you require. While everything is bright and shiny about these credit cards, it can wreak havoc to your budget if you do not make your payments in time.

If you’re also one of the people who’re in the habit of using these cards as an extended salary and are now finding ways to keep a check on yourself, here are the 3 tips that will help you to use these cards to your advantage without interpreting it into an extended liability –

1. Don’t Fall For The Gifts And Rewards

A number of departmental store and gas credit cards offer special gift vouchers and other rewards in case you spend a certain amount of money in one bill. More often than not, you will find that the amount that you need to spend is very high and you are not able to afford easily.

People fall for this marketing gimmick of gifts and rewards and make the mistake of going ahead and spending the unaffordable amount in spite of the fact that they know that they will have difficulties paying it back. Stop yourself from succumbing to these offers.

2. Keeping The Balance Low

Credit rating agencies use usage ratio on your credit cards in order to compile your credit worthiness report. What is credit usage ratio? It is a percentage of the total available credit card limit. So, if you have a credit card with $1000 credit limit and you have to make Kohl’s credit card payment of $700, your credit usage ratio is 70%.

According to experts, this ratio of your credit card must always be within 20% for the credit rating agencies to rate you positively. In case you notice that it is nearing the 20% mark, you can always make an interim payment for the credit card balance and bring it down.

3. Limit The Number Of Credit Cards

Credit card experts usually classify departmental store and gas credit cards as the perfect credit cards for building up your credit report in case you are looking for ways to establish your credit. But it would not be wise to have too many of them or you may get carried away and end up spending more than you repaying capacity. Credit card experts suggest having a maximum of 2 credit cards.

These 3 tips will help you get started and sort out your usage practice of the departmental and gas credit cards. Couple them with other fair usage policies to keep your nose out of trouble.

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