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Credit Cards have become ubiquitous in today’s society. Some people use them sparingly while others use them to extend a lifestyle that they cannot afford and there in lies the problem. Once you have fallen into the credit card trap the companies who administrate the cards have all sorts of ways to keep you in debt. In fact you’ll probably be astonished to learn of some of their techniques, listed below:

1. Even if you have been a card holder for years and never missed a payment they can still hike up your rate. They don’t have to have a reason if they have it written into your fine print. That’s why it is so important to read the tedious paragraphs on the back of your application. Many credit card companies have this ability so be careful! Your credit card company doesn’t care about you, they only care about making money.

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It might sound strange but using your credit card for all of your purchases has several benefits.  Utilizing your credit card for all of your monthly purchases allows you to take advantage of cash back and rewards programs.  In addition many credit cards will extend your warranty on certain items.  If you have the money to cover all of your purchases each month why not get a little someone back?

There are a multitude of cards out there these days offering reward points for every dollar you spend.  Typically the reward is equal to about 1% of your purchases although there are some out there that are 1.25%.  That extra .25% might not sound like much but it increases the amount of your reward buy 25%!  Not too shabby.

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Buying a car with your credit card certainly isn’t for everyone.  In most cases the cars we are talking about here are used but you can still get a decent vehicle.  Remember when you buy a new car it loses thousands of dollars in value as soon as you drive it off that lot.  A used car on the other hand can still have a lot of life in it and save you tons of money.

Finding a dealer that will take a credit card can sometimes be difficult.  If you are trying to buy privately then finding someone that will take a credit card can be next to impossible but there are alternatives.  Look around or ask your current credit card provider if they off cash advances.  If you have decent credit history many are having promotions where you can borrow the money at 0% interest for a period of time.  Most will charge you a one time 3% fee to access the money and transfer it into your bank account but it is a one time fee and then the money is yours.  So you are then free to deal with private sellers and the like.

Another benefit is you get a longer repayment period in most cases.  This results in a lower monthly payment which can make things much more affordable for many people.  Just don’t get stuck buying a car that does not last you until it’s paid off.

Yet another benefit is insurance, because you aren’t tied to a conventional car loan you decide how much insurance you need.  Be careful here though, it is your responsiblity.  If you under insure the car and then later on you get in an accident and the car is totaled you can be left with nothing to drive and you’ll still be responsible for repaying the money on that credit card.

If you are able to get a 0% interest rate during the promotional period make sure you know when that promotion period will end and what your interest rate will be after that.  Sometimes the rate is reasonable, sometimes it is not.  As of this writing the average auto loan rate for a used car is around 7.15% so if your rate defaults to anything lower than that then you aren’t doing too bad.  Just keep in mind that even with a lower rate you can end paying more in interest due to the longer repayment schedule of the credit card.

Another option when you get to the end of your promotional period is to juggle that balance onto another card offering 0% balance transfers.  Just make sure you read the fine print and know what you are getting yourself into.

Good Luck and Happy Car Shopping!