Credit cards can be a useful tool to help you manage your finances and build your credit history. And depending on the credit card you can get, it may offer fraud and purchase protection, and unlike cash, if your card is lost or stolen, it can easily be replaced.

There are many ways you can use your credit card wisely and even turn it into cash. This article will show you how.

• What is a Credit Card
• Types of Credit Cards
• How to Use Credit Card For The First Time
• How to Use Credit Card Wisely
• How to Use Credit Card to Build Credit
• Smartest Ways to Use a Credit Card
• Is it Better to Use Cash or Credit Cards
• How You Can Turn Credit Into Cash
• What You Should Not Use a Credit Card For
• What Are The Advantages of Using Credit Cards
• How Much Cash Should You Carry With You
• How You Can Get Cash From Your Credit Card Without Charges
• What Are The Advantages of Paying in Cash

What is a Credit Card

A credit card is a thin rectangular slab of plastic or metal issued by a financial company, that lets cardholders borrow funds with which to pay for goods and services.

Credit cards impose the condition that cardholders pay back the borrowed money, plus interest, as well as any additional agreed-upon charges. An example of a credit card is the Chase Sapphire Reserve credit card.

The credit company provider may also grant a line of credit (LOC) to cardholders, enabling them to borrow money in the form of cash advances. Issuers customarily pre-set borrowing limits, based on an individual’s credit rating.

A vast majority of businesses let the customer make purchases with credit cards, which remain one of today’s most popular payment methodologies for buying consumer goods and services.

Types of Credit Cards

Most major credit cards, which include Visa, MasterCard, Discover, and American Express, are issued by banks, credit unions, or other financial institutions.

Many credit cards attract customers by offering incentives such as airline miles, hotel room rentals, gift certificates to major retailers and cash back on purchases. These types of credit cards are generally referred to as rewards credit cards.

To generate customer loyalty, many retail establishments issue branded versions of major credit cards, with the store’s name emblazoned on the face of the cards.

Although it’s typically easier for consumers to qualify for a store credit card than for a major credit card, store cards may only be used to make purchases from the issuing retailers, which may offer cardholders perks such as special discounts, promotional notices, or special sales.

Secured credit cards are a type of credit card where the cardholder secures the card with a security deposit. Such cards offer limited lines of credit that are equal in value to the security deposits, which are refunded after cardholders demonstrate repeated and responsible card usage.

Also known as “prepaid” and “semi-secured” credit cards, these cards are frequently sought by individuals with poor credit histories.

Similar to a secured credit card, a prepaid debit card is a type of secured payment card, where the available funds match the money someone already has parked in a linked bank account.

By contrast, unsecured credit cards do not require security deposits or collateral. These cards tend to offer higher lines of credit and lower interest rates on unpaid balances.

How to Use Credit Card For The First Time

Your first credit card can be a step toward building a strong financial future and establishing an excellent credit score—or it can lead to a mountain of debt you struggle to repay for years. Before using your first credit card, here are some tips to guide you along the right path.

To Avoid Overspending, Set a Budget

A credit card is a convenient way to make purchases and earn rewards, but it shouldn’t be used to buy things you can’t afford. Having a realistic idea of the amount you can spend and pay off at the end of the month will keep you from getting in over your head. 

Try using a budget like the 50/30/20 method, which suggests spending 50% of your take-home pay on necessities like housing and groceries, 30% or less on items you want but don’t need, and 20% or more on savings and paying off debt. That will help keep your credit card spending in line with your income and other saving and spending priorities.

Monitor Expenses

Calculating the amount you can afford to spend is the first step. After that, be diligent about tracking your purchases throughout the month, potentially with the help of your credit card’s mobile app or website.

Once you’ve met your monthly spending limit, avoid using the card until you’ve paid off the balance. This kind of discipline helps you build a good credit score and keeps you out of credit card debt.

Set Up Automatic Payments

It can take time to get used to paying a bill each month. Protect yourself from late credit card bills by scheduling automatic payments ahead of your due date. Be sure the scheduled payment is more than the minimum payment—ideally, for your full balance—and that you have enough funds in your checking account before the payment is scheduled. Otherwise, you may be charged a late fee or a returned payment fee. 

Paying on time is also important because payment history is the biggest contributor to your credit score, the three-digit number that lenders use to evaluate your credit usage. Aim to pay every single credit card bill on time to keep your score strong.

Your credit card payment will be due on the same date each month, which makes it easy to keep up with your payment due date

Pay Your Bill in Full Each Month

Your credit card issuer only requires you to make the minimum payment, which is a percentage of your outstanding balance. While that may sound much easier and less expensive than paying the full amount you owe, it will cost you money over time. 

Paying only the minimum adds interest to your balance each month until you finally pay in full. Your balance will only decrease by a small amount each month, since a portion of your payment will be applied to accrued interest. The bottom line? Pay your balance in full each month to avoid paying interest

Download the Mobile App

Using your credit card’s mobile app lets you keep up with your credit card account on the go. You can log in any time to view your balance, check your available credit, make sure your payment posted, report a lost or stolen credit card, and more. You could do much of this from your phone’s browser, but apps are often designed for faster, easier use on mobile devices.

How to Use Credit Card Wisely

Your credit is a lot like your health. To keep it in good condition, you want to take care of it, minimize risk, watch for warning signs, and make responsible decisions.

Here are six healthy credit habits to help you take control of your finances and establish good credit.

1. Create and stick to a budget

Start by creating a budget that outlines all of your income and your monthly expenses. This will help you map how much you have available to spend, and how much debt you can you can afford to take on and repay.

2. Borrow only what you can afford to pay back

Show future lenders they can depend on you by borrowing only as much money as you can afford to pay back. A general rule of thumb is to spend no more than one-third of your income on debt—including mortgages, credit cards, and loans (e.g., car loans, student loans, and lines of credit). If it’s helpful, track your spending to make sure that you’re staying within your monthly budget.

3. Pay your bills on time

It is very important to pay your bills on time every month. Not only will you avoid late fees, but a large part of your credit score depends on how timely you are with bill payments.

4. Carry credit card balances responsibly

Sometimes, you might not be able to pay your balance in full. It’s okay to carry a balance on your card, but if you do, be sure that you’re making payments on time each month, are paying more than the minimum payment whenever possible, and aiming to keep your balance below around 30 percent of your credit limit at any time. Even if you pay your balance in full each month, getting too near to your credit limit can be a flag to potential lenders.

5. Check your credit reports at least once each year

Keep an eye on your credit reports. This will help you catch and correct potentially costly errors such as fraudulent accounts you don’t recognize, loans you’ve paid off but still show up as “open,” and any incorrect personal information such as your address, employer, or marital status.

Everyone is entitled to ask for a free copy of their credit report from each of the nationwide consumer credit reporting companies—Equifax®, Experian®, and TransUnion®—once every 12 months. Your free reports can be requested by phone, by mail, or by visiting  www.annualcreditreport.com.

Note: Your credit report will give you details of your credit history, but it does not include your credit score. You can check your credit score for free with CreditWise® from Capital One.

6. Take advantage of technology and tools to avoid credit pitfalls

Many credit card companies and banks offer free, easy-to-use tools help keep you in control of your accounts. These can include

• Online, mobile and phone access to your account, and bill payment options
• Statement alerts by text, e-mail, or phone
• Instant, free transfers to and from your other accounts
• Free transfers to your account from most other banks and brokerage firms

How to Use Credit Card to Build Credit

Using credit cards is one of the best and quickest ways to build credit. 

But if you’re rebuilding your credit score or starting from scratch, it can be difficult to get approved for a credit card in the first place. And, once you do have a credit card, it’s easy to damage your credit score and make it worse than before you started. That’s especially true if you don’t know the best ways to manage your credit cards. 

By taking a few simple steps, you’ll be on your way to a better credit score and a brighter financial future. 

Check Your Credit Score

The types of credit cards you’re able to apply for will depend on your credit score. So, before you get started applying for credit cards, it helps to know what your credit score is so that you can apply for the right ones. 

Discover is one of several credit card issuers that offer free credit monitoring tools to anyone who signs up—whether or not they are cardholders. Discover’s service provides a version of the FICO credit score, which is the score most lenders use. You can use the service to get a look at your current credit score.

According to Experian, one of the three major credit bureaus that collect and evaluate consumer credit information, your score can be classified as follows:

• Exceptional: 800-850
• Very good: 740-799
• Good: 670-739
• Fair: 580-669
• Very poor: 300-579 

Use this information to narrow down which cards to apply for. For example, if you have a “Fair” credit score (580-669), you can save time—and hard inquiries to your credit report—by waiting to apply for better credit cards until after you’ve built up your credit.

Understand What Goes Into a Credit Score 

Your credit score is made up of several parts, each of which can affect your credit score in different ways. According to FICO, here’s what goes into your credit score:

• Payment history: 35%
• Amounts owed: 30%
• Length of credit history: 15%
• New credit: 10%
• Credit mix: 10%

These are broad categories, and there are several ways that each one can affect your credit score. For example, while “amounts owed” comprise 30% of your overall score, FICO will actually consider what types of debt you have differently.

It’ll look at how much debt you have overall, how much of your available credit you’re using, and how much you still owe on revolving debt (credit cards) and installment loans like student loans and mortgages when it calculates your score. 

It sounds confusing at first, but it’s also good news for you: it means that you have a lot of options for improving your credit score. 

Consider a Secured Credit Card

If you have bad credit, one option is a secured credit card. These are available to just about anyone, but there’s a catch. You have to put down a refundable deposit to open the account, often of several hundred dollars. Usually, the deposit is also your credit limit. 

Keep Your Old Credit Cards Open

The length of your credit history is a relatively minor factor in determining your credit score, but it’s important nonetheless. To calculate this factor, credit scoring models will take the average age of all of your accounts. 

This means that by keeping your oldest credit cards open, you can keep a lengthy credit history that will boost your credit score higher. If you close those old credit cards, your credit history will be cut short and your score may drop as a result. 

Of course, there are also times when it’s still worth closing an old credit card. If it has a high annual fee and you’re no longer using it, then you should close it. And if that old card tempts you to revive some old, bad spending habits, then you should definitely close it.  

Keep an Emergency Fund

People often fall into credit card debt because life’s surprises pop up and it’s easier to just put the expenses on a credit card and pay them off later. But for many people, “later” never really happens because emergencies keep popping up and those new expenses join the old on the credit card. This causes your credit card balance to swell, which makes utilization ratio worse and that leads to a lower credit score… 

The best way to break this cycle is by keeping a separate emergency fund. That way, you can use your credit card to cover the emergency costs if you wish (especially if you’ll earn rewards from it), but you can also pay off the charges right away and stay out of the debt cycle. 

Smartest Ways to Use a Credit Card

Pay your bill in full every month

If you don’t want to end up like the “average American,” you need to stay out of credit card debt altogether. That means charging only what you can afford and paying your bill in full every month — or even a few times a month if it helps you stay ahead of it.

Doing so may seem challenging, but this is the number one rule of using credit cards instead of letting them use you; it is truly the only way to avoid getting into credit card debt, and the only way to avoid paying interest on your purchases. (Trust me, you don’t want to do that: A 20%-off sale means next to nothing after you get whacked with an 18% finance charge.)

Never pay your bill late

In addition to paying your bill in full, you should also make sure you pay your bill on time. Most issuers charge an ugly fee — often up to $39 — for a late payment. And since 35% of your credit score is based on your payment history, a missed payment can really ding your score.

Meanwhile, paying all of your bills on time is a great way to keep your interest rates low and improve your credit score – and your overall credit health – over time.

If you’re afraid you’ll forget and wind up missing your due date, set a reminder on your phone a few days beforehand or mark the date on your calendar. Another option: Adjust your online account settings so your bill is paid automatically on a certain day of the month through a direct bank draft.

Log into your account

One reason credit is easier than cash to use and keep track of is because it creates a paper trail. When you use credit for all of your purchases, you don’t have to keep receipts for things like grocery and gas purchases. Instead, you can just log in to your online account to see where you spent money, how much you spent, and how much you have left.

Checking in often — at least once a week — can help you stay on top of your spending so it never spirals beyond your control. If you notice yourself pushing the limits of what you can afford to pay back this month, stop using your card immediately until you get the balance paid down.

Examining your account activity can also help you spot any money leaks in your spending. Are you spending way more at Starbucks than you realized? Most credit cards offer powerful tools on their websites to track your spending — use them to your advantage.

Use your credit card as a compliment to your budget

If you’re disciplined enough, you can use a credit card as a compliment to your budget. This strategy usually involves creating a written budget, then using your credit card for purchases until you work through your predetermined spending limits. This is a great way to earn rewards for purchases you’d be making anyway, and to gain certain protections that only credit offers.

To stay on track, make sure to log in to your account once per week or every few days. Seeing your spending on your computer screen – in black and white – is sometimes the only way to let how much you’ve really spent sink in.

Know your limits

If you’re worried that you might overspend, ask your credit card company to lower your credit limit to something you know you can manage on a monthly basis. They should be more than happy to oblige since they ultimately want you to pay the money back, and they can often make the credit limit change effective immediately. Not everyone wants a $10,000, $5,000, or even $3,000 limit on their cards, and that’s okay.

Another strategy you can try: Use your card until you’ve spent a self-imposed limit, say $500, and then put your card away in a drawer until the beginning of the next month – or until you pay your bill in full. This can help you stay on budget and on top of your bill while allowing you to maintain a larger credit limit that might be useful in an emergency.

Only use your card for the big stuff

A lot of people who get into credit card debt complain that it sneaks up on them, and for good reason. Sometimes it’s those little $10 and $20 purchases that, over time, can take on a life of their own when left unchecked. If you want to avoid a “death by a thousand cuts,” consider using your card just for big purchases instead.

The best way to do this is to save up for your purchase in cash first. Then, after you make the big purchase with your rewards credit card (and reap the rewards points), you’ll have the funds to pay it off right away.

Another option: Use your card for big, important purchases, then pay it off over the course of a few months under a strict timeline — knowing that you’ll pay a bit in interest for the luxury of spreading out the payments. (That is, unless you can take advantage of an introductory 0% APR offer.)

When you go this route, start with a plan and stick to it carefully. For example, if you plan to buy a new washer and dryer for $1,200 and then pay it off over three months, make sure you’re prepared to pay $400 a month for three straight months (plus some interest). Ask yourself, “Can I definitely keep up that pace?”

It may also be helpful not to use your card on other purchases until you’ve paid off the washer and dryer in full. You don’t want that balance dogging you months after you thought it would be history.

Take advantage of all the rewards you can

Those who have the most to gain from credit cards are the people who master the art of credit card rewards. The best rewards credit cards offer an array of benefits – including cash-back, hotel loyalty points, and frequent flyer miles — that can be earned just for using your card for regular expenses such as groceries or the cable bill.

Of course, credit card rewards become a lot less lucrative when you’re paying interest on your purchases because you’re carrying a balance. To avoid that misstep, only pursue credit card rewards if you know for a fact that you can pay your balance in full. If you don’t know that for sure, those rewards probably won’t be worth it.

Choose cards with extra perks

Even if you’re not interested in credit card rewards per se, you can still leverage the benefits of a credit card. For example, some of the best credit cards out there offer perks such as free travel insurance, primary and secondary rental-car coverage, price protection, and extended warranties. If you pay your card in full every month, you can enjoy all of these perks for free.

Is it Better to Use Cash or Credit Cards

Since both payment types come with distinct advantages and drawbacks, how do you decide which method is right for you? We mapped out the pros and cons below:

Pros and Cons of Cash

Pros

• There’s no denying the convenience of cash: although there are rare occasions where businesses won’t take cash, nearly every retailer accepts it.
• If you only spend the cash you have, you can’t carry a balance and won’t pay interest on purchases.
• Tangible currency can be easier to manage. Some people feel that the act of counting their money and handing it over gives them a better appreciation for their savings and makes them less likely to overspend.

Cons

• Cash is by far the most vulnerable to theft. If you lose your wallet, there’s little chance of it being returned with the money untouched. To be safe, those who rely on using cash should deposit it in the bank and make regular withdrawals to pay for their purchases.
• It’s harder to be prepared for an emergency. If you need to drop $500 on a last-minute plane ticket or car repair, chances are you don’t have the cash on hand to cover it.
• Some people say they are more likely to overspend when they have cash in their wallet because it makes them “feel rich.”

Pros and Cons of Credit

Pros

• Using a credit card can be a more convenient method of payment than using cash. Credit card users are protected from fraudulent transactions by the Fair Credit Billing Act, which limits their fraud liability to $50. Yet in practice, most card issuers waive that requirement by offering a zero dollar fraud liability policy meaning that consumers are not responsible for unauthorized purchases on the credit card account. Credit card users are even protected when a charge is authorized, but the goods or services purchased are not delivered, or what is delivered is not as described. In these cases, cardholders can file a dispute against the merchant, an option that is not available to users of cash, checks, or even debit cards.
• Credit card users are also able to conduct transactions online and over the phone, and hotel and rental cars are much easier to reserve with a credit card than they are with cash.
• You may earn cash rewards just by making purchases. Many cards offer travel and cash back rewards, not to mention purchase protection benefits.
• You’re covered in an emergency. Did your fridge break? You can get a new one without having 100% of the money in the bank.

Cons

• Credit cards require discipline. If you don’t pay your entire statement balance in full and on time every month, you will be charged interest on your purchases. And if you miss a payment, you can incur late fees. Successfully taking advantage of the many conveniences credit cards offer requires savvy money management.

How You Can Turn Credit Into Cash

Get Instant Cash from a Balance Transfer and Refund

If you already have a credit card with a low balance, there is another way to get cash from it. Let’s say you have a balance transfer offer of 0% from one of your new cards. You can transfer the maximum allowed from the 0% interest card to the card with the low balance.

For example, if the low balance on your existing card is $300, ask to transfer $3,000 to it. Then you will have a balance of negative $2,700 on your original card. Did you know that you can call the credit card company and they will issue you an overpayment check?

This is a check or cash money that can go right into your bank account.

So you have another way to get a $3,000 cash loan at 0% APR!  Or you can also use this negative balance to pay off any bills that accept credit cards. You will still be paying 0% interest – because you are not actually charging anything.

Note: This only works on an existing credit card with a balance. Don’t balance transfer to a credit card with a zero balance. The bank will not accept the transfer on a zero balance credit card. (All you need is a very minor balance for this to work.)

Use Convenience Checks to Turn Credit Card into Cash with Lower Fees

Convenience checks are the checks that come with your credit card statement in the mail. These are blank checks you can write out to anyone. The same fees and interest apply, though, as using your credit card for a cash advance. So if you write the check out to yourself and put it in your bank, it works like a cash advance.

However, this is not always true.

To get you started using convenience checks, a bank may send them out with a special offer. Just like they sent you a 0% balance transfer offer. This will be something like no cash advance fee or 0% APR for 6 months. If you use the checks by a certain date.

Always be on the lookout for special offers – and liquidating credit cards for cash will work faster.

Get More Cash With Companies That Accept Credit Cards and Mail out a Check

There are also companies that will charge your credit card and send out a check on your behalf. Of course, since even utility companies take credit cards, this mainly applies for rent. Most landlords want cash, not credit.

These companies, like Plastiq, RadPad, RentMoola, Urbanr, and Venmo are all online. They charge 1.5% to 2.5% of each transaction amount. They charge your rent to your credit card like a purchase. Then they send a check to your landlord.

Which means that this charge counts as a straight purchase on your credit card, with no cash advance fees. Which also means that if you have roommates, you can charge your entire rent.

Then take their cash and put it in your bank account.

These companies will also take multiple cards for one rent check, which is really flexible. This is why it is important to have three or four cards to turn credit cards into cash.

Always keep your options open when you are using a balance transfer strategy to invest in your future.

A Merchant Account Will Turn Credit Card into Cash

A merchant account is a business account that will also help with liquidating credit cards. This is because when you open a merchant account, you can take credit card payments from other people. This is money that goes right into your bank account as cash.

You can then use the cash to pay off a balance for when you take a cash advance of your own.

So when can you take cash from other people as payments?

If you have roommates, you can take their share of the rent on their credit cards. Or if anyone owes you money, they can pay you by using their credit card. If you are starting a business you can take credit cards as payment.

It all goes into your bank account as cash, minus the processing fee.

All you need is a card reader and a credit card processor. The card reader goes on your cell phone so you can take payments anywhere. The money will be in your account within a few days! Some of the top credit card processors are Square, Payment Cloud, Leaders Merchant Services, and Flagship.

Many of these processors do not run a credit check or require you to have a business checking account. Some specialize in high-risk businesses or people with bad credit. 

This is another way to turn credit card into cash you may not even have considered.

What You Should Not Use a Credit Card For

Don’t Use Your Credit Card When You Already Have Debt

It’s smarter to pay your existing credit card balances before you charge something else. Making new purchases before you’ve paid off old ones is an easy way to get into credit card debt.

If you don’t know how much debt you have, pull out your credit card statements, tally up your balances, and develop a strategy to pay down your balances. Try to pay off your cards before you charge something else.

Don’t Use Your Credit Card When You Can’t Afford to Pay the Balance

This is arguably the number one time you shouldn’t use your credit card. If you can’t afford to pay for a purchase in cash, then you really can’t afford to put it on your credit card.

If you swipe your card knowing you can’t pay back what you bought, you could technically be guilty of fraud. Some creditors may use the fraud argument to keep you from having that debt discharged in bankruptcy later on.

Charging things you can’t afford is the surest way to get into debt and ruin your credit score.

Avoid Credit Card Purchases When You’re Applying for a Mortgage

Mortgage lenders frown on big credit card balances when you’re applying for a mortgage. The more credit card debt you’re carrying, the harder it will be to qualify for a mortgage. That’s because lenders look at your credit utilization, which is how much of your credit balance is used. Lenders also look at your debt-to-income ratio, which is the relationship between your income and your monthly debt payments.

High credit card balances mean high monthly payments, and that could increase your debt-to-income ratio. It’s also best to not make big credit purchases while you’re being approved for a mortgage because that could also impact your debt-to-income ratio.

It’s best to save big credit card purchases at least until after you’ve completed the mortgage process. It’s even better to wait a few months after you’ve closed to get adjusted to having a mortgage and other housing expenses.

Don’t Use Your Credit Card to Make Yourself Feel Better

You could easily end up overspending if you’re swiping to cure the blues, especially since shopping is just a temporary fix for a deeper issue. Look for other ways to solve emotional dilemmas, like exercise, journaling, gardening, or solving the problem that’s keeping you distressed.

If you’re finding yourself regularly turning to shopping and spending and living beyond your means, you may also want to consider counseling. Running up a credit card balance could create additional stress and anxiety if you don’t have the money to pay the credit card balance.

Don’t Use Your Credit Card If You Don’t Trust the Person or Device Handling It

With credit card skimming, thieves can steal your credit card information without you noticing. Restaurant servers have been caught passing credit cards through a skimmer in an otherwise legitimate transaction. Fraudsters are known to have placed skimming devices on ATMs and at gas pumps.

You’re not liable for most fraudulent charges, but they’re still a pain to deal with. Don’t use your credit card if you think there’s a chance your card information could be compromised.

What Are The Advantages of Using Credit Cards

• Purchasing Power: Credit Cards enable users to make big ticket purchases they might not otherwise be able to afford.
• Rewards: Many cards offer rewards programs that will accrue points, discounts, or other benefits like frequent flyer miles.
• Convenience: Credit cards reduce the need to carry cash. Most retailers accept credit cards and they are pretty much required for online purchases.
• Trackability: The electronic record keeping that comes with credit cards make it easy to track your spending and identify fraud.
• Use during an emergency: There are times when money is the simple solution to an emergency. If you get hit with an unexpected expense, credit cards can be the quick and easy solution you need.
• Builds credit history: Responsible use of a credit card over time builds your credit history, qualifying you for better interest rates and other financial benefits.

How Much Cash Should You Carry With You

Paying everything with your credit card is surely nice. However, there are still moments in life when you have to pay with solid cash.

When those moments arrive, you can either wonder with anxiety if you have enough money with you or sit back and relax, knowing that you do.

The secret is knowing how much cash to carry with you at all times.

Due to a myriad of contradictory information online, though, figuring out what’s the golden number can be daunting.

Bill Gates, for instance, carries no cash. Users on Reddit swear by an infinite number of amounts, from $10 to $500. To make things even more complicated, in a recent survey made by a popular US bank, over three quarters of the respondents affirmed that they never keep more than $50 in their wallet. Part of the participants even stated that they wouldn’t carry more than $10 in cash.

However $50 is not a reasonable amount to have with you in case of emergency, let alone $10. On the other hand, $500 is quite a lot to lose if your wallet gets stolen or lost.

That’s how experts came to the conclusion that you should always have $200 in your wallet.

Why 200?

If you’re the kind of guy who questions everything, you might wonder why $200 and not more or less.

The reason is simple. Two hundred dollars is enough money to handle most emergency situations in those circumstances when paying with a credit or debit card is not possible.

For instance, if your car breaks in the middle of nowhere or you run out of gas, $200 is enough to call out the tow truck to get you to a car repair or gas station.

If you’re in the restaurant and your card gets declined, $200 can save you from an embarrassing situation in which you try to contact your card provider to see what happened.

How You Can Get Cash From Your Credit Card Without Charges

Here is what you can do to withdraw cash from your credit card with little or no charges.

1. Go to a store which sells reloadable visa prepaid gift cards and load it for $500 by paying $4.95 fees. Buy two of them for a total of $1000 in gift card and $9.9 in fees. Make sure the gift card is pin enabled.
2. Go to USPS and buy a money order for $998.40. USPS will charge you a fee of $1.60 on the money order. Ask to split the transaction in two debit cards for $500 each. Use the gift card you bought and choose any 4 digit pin you swipe the card.
3. Take the money order and go to a bank to cash the money order.
4. Now you have $998.40 in cash, $1009.90 in credit card dues; which means you incurred a fee of $11.5 to get $998.40 in cash.

What Happens if You Don’t Use my Credit Card for a Month?

Nothing much happens if you don’t use your credit card for a month. You’ll just need to keep up to date with your monthly payment if you have an existing balance. … And on top of that, you’ll still receive a monthly statement if you don’t make any purchases, but there won’t be anything new to pay off.

What Are The Advantages of Paying in Cash

Spending Within Your Means

The simplest advantage to paying with cash is the limitation it puts on what you buy. Without a buy-now-pay-later mentality associated with credit cards, you will purchase only items that are affordable, and covered by the cash you have on hand. This way, you never have to worry about buying anything you can’t afford at the moment. Paying with cash also helps to curb impulse spending habits.

Keeping Debt at Bay

According to CardRates.com, Americans racked up $1 trillion in debt, $830 billion of which is from credit card usage. The site also reports that more than 126 million households have credit card debt exceeding $6,500.

Interest rates, annual fees and other charges can make a consumer’s monthly credit card bill skyrocket and get them into a vicious cycle of debt that is difficult to overcome. By paying with cash, consumers may protect their credit and avoid unneeded debt.

Protecting Your Identity

The Federal Trade Commission reports that fraudulent use of credit and debit cards is taking place every single day. By using cash, you protect your identity and your credit. You can use your card safely online, as long as you take the steps to protect yourself ,such as having the most up-to-date virus software and changing your passwords often.

Conclusion

There are many benefits to keeping a credit card in your wallet, but there are some risks, too. When used strategically, credit cards can help you establish a solid credit history, earn rewards on everyday purchases, pay off high-interest debt or obtain interest-free financing.

The trick to using these benefits while maintaining healthy credit card use is to use them to pay for items you’d buy anyway, pay your bill in full and on time every month, and keep your credit utilization rate low.