As you might know by now, the bank rewards you when you spend money using your credit card. That reward usually comes as points you can use for shopping or travelling. Unfortunately, many people are greedy, and they want to accumulate tons of points. That translates into massive spending, which leads to a bad credit rating.
Did you have any idea that you can actually use your credit card rewards for fixing your credit? Probably not. There are three steps you have to take in order to do that, and we’ll present them to you.
Fixing Your Credit Score with Your Credit Rewards
Using the credit rewards doesn’t hurt your credit score in itself. The credit score drops when you spend more to get more. Moreover, you’ll accumulate more debt.
Now, let’s see the guidelines:
- Assess the stores where it’s most feasible to pay with the card
Purchasing everything with one credit card could damage your credit score. That’s why it’s recommended to use a card for groceries, for instance, and another one for purchasing anything else.
This way, the credit score is always steady. If your credit score is low, then it will start healing itself. It’s a method of fixing your credit without the hassle of filing tons of paperwork.
Another way of fixing your credit without needing to worry about the paperwork is choosing the guidance of a service, such as Clean Credit. We are a trusted Australian credit repair company that has extended experience in dealing with lending companies and creditors.
Even though you can attempt to do this yourself, the input of a professional could make the world of a difference, as the steps you need to follow are quite elaborate.
- Use your points smartly
Not all points/rewards are the same. They usually have different purposes. Also, some are more valuable than others. You should do some quick research and see what would be the best use for a particular category of points. This, too, will protect your credit score.
More often than not, points are used for travelling and accommodation. That does not mean that you cannot get points that can be used for something else, like shopping, for example.
- Don’t gather points for the sake of doing it
The value of the points is always the same. There are many people who don’t spend their points, thinking that they’re going to amass fortunes. Needless to say, they won’t. They won’t decrease in value either. It’s your loss if you don’t use them, banks lose nothing. This does help your credit score.
However, when you amass points, you automatically spend more, so you might get in debt.
Use those points when you get them, don’t wait for the magic to happen and for them to transform into thousands of dollars.
Normally, fixing your credit is a lengthy, tiring process. Adopt proper financial behaviour and learn when it’s better to pay in cash. Thousands of people acquire huge debts from overusing credit cards. Subsequently, their credit scores drop considerably. If that happens to you, you may not be able to get a loan until your score is back to an acceptable level.
Now you know that credit cards have a role in fixing your credit. You can inform others about the dangers of overusing their cards, as well as about the things that can help them fix their credit scores.