How to Get the Most from Your Credit Cards: Live Interest Free, and Get so Much More

With their high interest rates and annual fees, credit card debts are helping to keep so many Americans mired in seemingly insurmountable debt. With a little time and diligence, however, most people can not only get out of debt, but can make their credit cards work for them. By taking a little time, organizing your debt, and looking for cards that offer maximum benefits, you can actually end up ahead by using your plastic.

The first thing to do to get the most from your credit cards is to stop paying interest on your balances. By transferring all your credit card balances to cards with introductory 0% interest balance transfer rates, you can cut down your payments dramatically and keep your current balances from rising. Make careful note of when these 0% rates expire- most offers allow you 12-24 months of 0% interest- and move the balances to new 0% interest balance transfer accounts if necessary while continuing to pay off the accrued debt.

Next, separate your credit card needs into three categories: debt reduction, emergencies, and everyday life. For these three uses, you will be looking for different things in your credit cards.

We have already covered debt reduction. Debt reduction credit cards should be comprised solely of accounts with 0% interest balance offers. Paying interest to credit card companies is simply giving away your money, and it should be avoided at all costs. Most Americans do not realize just how much money they are paying in needless interest every year. With some simple transfers of balances and careful record keeping, you will be amazed at how much more quickly you can pay off your debt when you remove interest payments from your financial picture. NOTE: read the fine print on the 0% interest balance transfer offers carefully. The most important detail to consider is late payment penalties. Most of these offers will negate your 0% interest status if you make even one late payment. Should this happen, and interest kicks in again, immediately accept another 0% interest offer from another credit card company, and move that balance. Paying interest is BAD!

For emergency use, you want to find the credit card that will offer you a reasonably high line of credit with the lowest possible interest rate. If you have a good credit rating (and in many cases, even if you don't), you can often turn one of your current accounts into an excellent emergency credit card account by contacting the customer service department of the company and negotiating a better rate with them. I have discovered that the best tactic for me has been to initiate the call by informing the customer service representative that I want to cancel my account (you must have a $0.00 balance to do this, which has hopefully been covered by transferring your balances to a 0% interest account). This gets the customer service representative into my playing field. They will inquire about my reasons for canceling my credit card account, at which time I inform them that I have received an offer for a credit card with a much lower interest rate (I quote the lowest rate I have been offered), a higher line of credit (I quote the highest offered line of credit), and no annual fee (always say this, if your current card charges this fee). By the time you hang up, your current card should have its annual fees waived, your line of credit should be raised, and your interest rate should be equal to or lower than the best rate you have been offered. If not, keep an eye on your mail and accept the best offer that comes in. Save this card, and use it only in case of emergency.

The last card is the most fun: your everyday use card. This is where you can get the credit card companies to work for you, and you get to decide what you want them to give you!

You should not think of your everyday card as a credit card, but rather as an extension of your bank accounts. Almost everything can be paid for by credit card these days- groceries, utilities, even your rent in some circumstances. Your morning coffee and fast food fixes can now be charged! Whenever you are accustomed to paying for in cash or by check should now go on this card. Keep a record, just as you would your in checkbook, and simply pay one payment at the end of each billing cycle. This credit card is like cash. It should be paid off each and every month.

Why would you do this? Because this is the card that will give you free stuff! There are unbelievable offers for credit card enticements available these days, you simply need to decide what you want most, and then collect the freebies offered while paying the bills that you already pay! My husband and I use a miles card. It is amazing how quickly regular life can earn free trips (we are heading to Jamaica soon, and have already earned several free flights to California just by paying our bills). Some like to take out cards that partner with retail companies or hotel chains. By doing a little research, you can find the card that will give you the benefit you would value most, and end up with free perks. All you have to do is pay your bills!

Credit card companies are collecting an incredible amount of money from their consumers through their interest charges and annual fees. The savvy consumer can learn to use their tactics to effectively make the credit card companies work for them. Living interest free while collecting the perks that most of these companies offer to try to make money off their consumers is not only doable, it's a breeze!