How to Beat Banks and Credit Card Companies at Their Own Game

Many people I know pay a lot of money to credit cards and banks every year in interest, sometimes as much as 20 to 29 percent. For a couple of years, my husband and I were also among them. We were paying our bills with credit cards, but then we had to pay with a credit card  for everything again after we paid it back because we didn’t have anything left. It felt overwhelming. There were several high interest credit cards that we were servicing on an ongoing basis and we seemed never to be able to catch-up. It is probably a very familiar story to you, but there is hope. We reversed our fortunes and so can you. It is possible.

 Now, we no longer pay high interest to credit cards, if at all, and it’s the credit card companies that pay us every month for the privilege of having our business. Yes, that is right. You don’t have to be a slave to credit card companies, paying them double or more of what you borrowed. They can be paying you hundreds of dollars every year instead and I am going to share here how you can get to that place in your personal finances too.

 Credit card companies cash in on desperation and/or lack of self control of their customers. They encourage you to spend beyond what you can afford, so that when the bill comes and you don’t have enough to pay them back, they can charge you lots of interest. But with a few good personal finance practices, you can beat them at their own game. You don’t have to fall into their traps, but you can use them instead to your own advantage and here is how.

 The most important thing is to create a good credit record. Having good credit record is very important for a number of reasons. Most importantly, you will be offered better deals whenever you do need to borrow, sometimes lower than 3 percent or even as low as zero percent interest. You will also be eligible for credit cards with the best reward programs such as MBNA Smart Cash that gives you back up to 3 percent on nearly everything you buy with it. And here is the catch. If you spend only what you would have normally spent on it in any given month and pay it back in full, not only you will not pay a dime of interest  on it, but the credit card will pay you for using their service. We earn $50 dollars a month from MBNA doing just that, which works up to over $500 a year, money that we can now put away for retirement or a vacation.