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Strategies to Win the Credit Card Game

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Credit Card GameWhen people find ways to work around long-standing traditions or practices it’s often called “gaming the system.” A good example of this is the credit card industry, which brings in billions of dollars each year from fees and interest. Unlike other products and services, credit cards are not designed to be one-size-fits-all with products offering both advantages and pitfalls. The idea that a cardholder can deceive a lender is frankly ridiculous, but there are a few loopholes you can use to your advantage.

The fact that people try to use the terms of a credit card agreement to their benefit is no surprise to lenders. They regularly modify their agreements so that they can’t be used for unintended purposes. But lenders often leave loopholes open, and since very few people take the time to go over the details, they usually go unnoticed.

Lenders Are Aware of Loopholes

One thing is for sure, these so-called ‘loopholes’ would be filled in a heartbeat if too many people began to use them. For the time being, however, credit card issuers are making billions of dollars by leaving some loopholes in-place, and if you have an excellent credit and a strong credit score, you can take advantage of terms that will allow you to pay off credit card debt at little or no cost, or earn free rewards for your responsible behavior.

To actually “game the system,” it will require a strong commitment and a willingness to act responsibly. As with most things that require effort, there is a risk. Play the credit card game well and you’ll pay down your debt faster while saving money and earning big rewards; play it poorly and you could get yourself deeper into debt.

STRATEGY #1 – Use 0% APR Credit Cards to Pay Off Debt

One key strategy you can use to win the credit card game is lengthy balance transfers with zero fees. To take advantage, you’ll need an excellent credit rating and a strong commitment to reduce your spending. Here’s how it works:

  1. Transfer balances: To begin, compare offers and find one that charges no annual fee with the longest 0% balance transfer available. It’s important to acquire a card with large enough credit limit to accommodate all of the balances you’re trying to pay off.
  2. Be aware of fees – Virtually every balance transfer offer will include a balance transfer fee of 2% to 3%. Although the savings can still be substantial, be aware and look for the lowest balance transfer fee possible.
  3. Transfer again – Before the first transfer offer expires, be prepared to transfer to another card with the same zero interest rate and limited fees. You may need to shuffle the balance multiple times to reach your goal. Be aware that regular transfers could lead to a drop in your credit score over the short-term. For many, it’s a small price to pay for the amount of money you can save on interest charges.

Careful maneuvering is essential for the plan to be effective. Design a strategy that looks to the future by preparing a calendar that highlights when your current credit card account will expire and a timeline that reminds you to begin searching for your next zero APR, no-fee balance transfer. Apply well in advance of the expiration date of your current card so that there’s no lapse in the free use of your account when making the transfer.

Credit card companies offer these popular, money-saving introductory cards to lure you in while hoping you’ll stick with them when the standard rates kick in. That is when the cost of using credit begins to add up, so be prepared to transfer the balance before that happens.

STRATEGY #2 – Use Credit to Earn Big Rewards for Free

If you are one of the lucky Americans who doesn’t carry any credit card debt, another way to move ahead in the credit card game is by strategically using multiple reward cards to earn big rewards. This is another method that requires a plan that you can commit to.

Reward cards that may be the most benefit, include: cash back, travel, gasoline rebate and tiered reward cards. Each one is used for purchases that you would have paid for with cash and never for products or services that go beyond your everyday expenses. When the billing statement arrives, the goal is to pay the balance in full before any interest accumulates. In return for using plastic responsibly, you’ll earn points or miles that can be redeemed for cash, merchandise and travel expenses – paying nothing to do so.

When considering either option, you should always be aware of the impact on your credit score. By demonstrating responsible account management your credit rating will remain strong, but only open new accounts when absolutely necessary, spreading them out by at least six months. If you find yourself falling behind or making purchases you can’t afford, cut them up and start fresh when you can be more disciplined.


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