Maximizing Your Money with Credit Card

Note that the following will only work if you:

1. Pay the balance of your credit card in full every month.
2. Do not buy more than you can afford.

Points

Almost all credit cards will award you cards for your usage.  In most cases, these points can be used to redeem for items, flights or vouchers.   Initially, I was excited with this offer but soon I found the items offered are things that I do not use or even need.  A few of the cards started offering options to redeem the points for cash which can be used to offset the amount owed on the card.   Nowadays, you will be able to find more and more bank issuing Cashback cards.  So the points have cash value. 

As consumers we should shop around and find the card that provides the best return the points.  To do that, we should:

1. Convert all the points to actual cash value.
2. Compare and see which has the highest cash value.
3. Look at the cash or the items offered.  If the items offered is something that you use but at a substantially lower cost then maybe the points are still good to accumulate.
4. See if the points expire.  The points may be good but if it expires too fast, you may never get a chance to use them.

When dealing with cash back cards, make sure to read the fine prints.  Most cards have either a monthly cap or an annual cap, especially ones that have a high return value (i.e. percentage of the purchases).

Annual Fee

Annual card can make up a large portion of the fees.  Note the following:

1. There are still cards that charge annual fee but due to the competition, the banks will waive them if you call them and ask them to.
2. Certain banks require a minimum usage of the card per year before they automatically waive the annual fee.
3. If you want to give supplementary cards to family members, some of the banks provide free supplementary cards (note how many such free supplementary cards are allowed).

What do you think?  Do you have any suggestions to improve this?