5 Tips To Get The Most Out Of Your Credit Card

CompareHero.my Team

CompareHero.my Team

Last updated 07 December, 2022

If you own a credit card and know how to use it the right way, you can actually improve and boost your credit score. Here are 5 tips on how you can take advantage of your credit card usage and maximize your credit rewards to earn extra benefits!


Your credit card isn’t just there to help you pay for stuff in advance. That little piece of plastic holds more power and benefit than you know!

In this article, we’ll show you how you can maximize credit card rewards and use your card to benefit you.

1. Choose your card wisely

If you don’t have a credit card yet, or if you have the capacity for another one, it’s important to choose the right card that fits your lifestyle.

Ask yourself these questions:

  • Where do you tend to spend most of your money? 
  • Do you fly or travel a lot? 
  • Do you spend a lot on petrol? 
  • Do you shop online most of the time? 
  • Do you generally just prefer getting cash rebates back?

Choose one that suits you best so you can make the most out of the benefits. Start comparing credit cards here.

 

2. Keep your utilization rate low to gain a good credit score

What’s a credit score? In a nutshell, it is a number between 300-850 which represents your creditworthiness and how likely you are to repay debt. These are the three most important digits of your life. Banks, companies, money lenders, investors, and even some potential mothers-in-law will check your credit score before deciding whether or not to have anything to do with you.

A good credit score shows that you’re trustworthy when it comes to money, so it’ll be easy for you to get financing help when you need it. Likewise, a poor credit score will raise red flags and have institutions turn away from you.

Your credit score is determined by several factors, one of them being the amount owed (20%). Take a close look at your debt utilization ratio. If your credit limit for all your cards combined is, say, RM50,000, you should utilize no more than RM15,000 (30%) for your credit score to reflect positively. The lower, the better!

This is also why people keep their underutilized cards open instead of closing them. In a way, it’s a way to game their credit score.

Read also: How Cancelling Your Credit Card Can Affect Your Credit Score (Instead Of Helping It)

3. Use it to pay for your flights for free insurance

Did you know that if you pay for your flights with your credit card, you can automatically get protected against travel mishaps? This will of course depend on the credit card you choose, as some cards don’t offer this benefit.

Also, it’s worth mentioning that this would only cover the principal cardholder and not others in the traveling crew. (So consider getting others in your trip covered with a separate travel insurance policy.)

4. Collect and redeem all your points 

Now you also would know that credit cards come with reward points (except if they’re cashback-only)... But the thing is, these reward points have expiration dates! Some cards will give you evergreen reward points, but cards like these are quite rare. As such, it would be a good idea to check up on your card’s terms if you’re unfamiliar with them. 

So, what can you do with your points? 

If you have a credit card with air mile benefits (e.g. Alliance Bank Platinum Visa, HSBC Visa Signature), you can exchange your points for air miles which can then be used to redeem flights or to upgrade to first class.

You can also use your points to redeem a whole bunch of other stuff too, such as watches, kitchen appliances, bags, makeup, shopping vouchers, and more. Just be savvy enough to compare your points to the item you want to redeem - there may be times when it would make more sense to buy the item as is! 

5. Take advantage of all the promos 

The thing about credit cards is that they’re always tied to promotions. They could have a promotion with a local gym, a popular food chain, a supermarket - the list goes on. 

To make the most of your credit card, take advantage of the promotions being run with the card. You may get discounts of 20% or more, and even enjoy great freebies! 

If you’re not already following your banks on social media, we’d suggest you start now. That way, you won’t ever miss an update from them about their latest promotions. 

But if you don’t pay your balance in full...

While it’s great that this little piece of plastic can add so much value to your life, it’s never worth it if you’re accumulating credit card debt. To enjoy using your card to your fullest, remember to always pay your owes in full so that you’ll never have to pay exorbitant credit card interest (which starts from 15% p.a.!) on your balances. 

Get the latest credit card promotions here and don’t miss out on any chance to win exciting gifts when you apply via CompareHero. 

The CompareHero.my team is comprised of many talented individuals, sharing their knowledge, experiences and research to help others make better financial decisions.