1. Pay down your credit card bill every month
Pay down your credit card bill monthly. Don’t just pay the minimum, or you will quickly find yourself with a snowballing mountain of debt that will be hard to manage.
2. At least pay the monthly minimum on time
If paying the entire balance by your due date is unrealistic, at least pay the minimum amount owed by the payment deadline. If you don’t, you could be hit with increased interest rates, and a lower credit score.
3. Set-up direct payment if possible
You can set-up direct payments from your bank account to your credit card. This lets you automatically pay your credit card minimum monthly payment, which goes a long way to protect your credit history and boost your credit score. Another benefit is that automatic payments, combined with additional payments to pay down the credit card balance, can work to increase your credit score and, at the same time, minimize costly debt.
4. Carry a balance occasionally? Keep a low-interest credit card in your wallet
If you carry a balance from time to time, get a low interest credit card. Even better, get a low-interest card with no annual fee. By using low-interest credit cards and no-annual fee cards, you can reduce the cost of carrying a credit card balance.
5. If you carry a balance, always look for a balance transfer offer
If you already carry a balance, keep an eye out for [low rate balance transfer offers](https://money.ca/credit-cards/best-balance-transfer-credit-cards. Shop around and you can find offers that give you a no or low-interest grace period, usually between six and 12 months, along with low transfer fees.
6. Don’t use the same credit card to charge and carry balances
Use your rewards credit cards to earn points or cash back on new purchases and low-interest credit cards for carrying balances. Transfer your balances from your rewards card to a low-interest card, to find even more savings.
7. Pay down your balance before your introductory period ends
Banks have designed low rate and balance transfer offers to make money when you forget to pay them down or transfer to a new offer before the introductory period ends. Don't get caught with a high interest payment on a credit card balance. Use reminders and calendars to keep track of offers and be sure to shop around for new credit card deals and promotions.
8. Pay down your most expensive balance first
Eliminate high interest debt as fast as you can. If you’re carrying multiple balances on different credit cards, and can’t consolidate your debt on one low interest credit card, pay down the most expensive debt first.
9. Don’t go over your credit limit
Although banks provide credit limits, they often allow cardholders to go over their limits – go figure. But this generosity can come at a cost. Some card issuers will charge you an over limit fee, often $25 or more, while some will end up charging you more in interest, or both! To minimize these extra costs, be sure to read your credit card fine print.
10. Get a specific card for foreign purchases
Most Canadian credit cards charge a foreign transaction (FX) fee of 2.5% on any purchase that is not in Canadian currency. Simple back-of-napkin math shows these FX fees can quickly wipe away any benefit you might get from your rewards (and still cost you!). To minimize FX fees, get a Canadian credit card that does not charge any foreign transactions fees, or offers bigger reward earnings to offset FX fees.
11. If you don’t keep a balance, use a rewards credit card
Why use cash, debit or a non-rewards card if you can make the same purchase and get 2% to 5% cash back or earn points towards a free flight? So long as you pay off your balance, you might as well get rewarded for purchases you would have made anyway.
12. Don’t use more than 30% of your credit line
Carry a credit card balance that exceeds 30% of your credit line and your credit score will likely take a hit. However, there are strategies to avoid the credit score penalties. For instance, call your card provider and ask for a credit increase — in other words, ask if you can be authorized to spend more on the card. The idea is not to use this extra credit, but to stick within the 30% good-credit limit, while still racking up your cash back or rewards points.
13. Don’t use the cash advance!
Few credit products are more expensive then using your credit card's cash advance feature. Not only will you pay a fee for this service — this can be a flat fee per advance or a percentage of the amount you’re withdrawing — but the advanced sum will start accumulating interest immediately and usually at a higher interest rate. For instance, your credit card could charge you an annual percentage rate (APR) of 19.99% on all purchases but charge 24.99% on any cash advances.
14. Use credit cards for insurance and purchase protection
How many times have you paid for extended warranties, car rental insurance, travel medical and trip cancellation insurance? Before you ever do that ever again, check your credit card to see if your card automatically covers you if you make the purchase with your card. These hidden benefits can save you hundreds in extra costs, each year.
15. Put the screws on your credit card company
Not enough people do this. Many credit card companies will lower your interest rate if you threaten to transfer your balance, or come up with a payment plan to reduce your monthly payments. Some will waive an annual fee if you threaten to close your account. Squeaky wheels get the grease, so don't be afraid to ask.
16. Maximize your rewards
Different credit card programs offer different earn rates for making different types of purchases. Find and use the credit cards that maximize your rewards based on where and how much you spend. You can also use a credit card comparison site to help you find the best credit card for you.
17. Check for sign-up bonus offers
For whatever reason, banks continue to reserve their best offers for new customers. If there’s a bank offering 25,000 reward points and waiving the first-year annual fee, and all you have to do is make one purchase, why wouldn’t you take the offer? Plenty of credit card “churners” have travelled far and wide on the banks’ dime, why shouldn’t you? Just be careful, use calendar reminders to help you keep track of when that first-year is complete and it's time to cancel the card (to avoid the fee). Of course, regular churners will tell you that many banks and credit card issuers are now wise to credit card churning; these issuers will deny you the promo points or fee waivers if you don't meet their 'new client' criteria, so be sure to read the fine print.
18. Don’t apply for a credit card you won’t be approved for
Some of the juiciest offers go to those with the best credit and highest income. If you know you don’t fall into either of those categories, don’t bother applying for a premium credit card as the chance of being declined is much higher — and that application will prompt a hit on your credit score. Instead, review credit card application guidelines and be sure you fall within the issuers new client requirements.
19. Read the fine print
The Government of Canada has done a great job of making cardholder agreements, especially the information box — known as the Shumer box, or the easy-to-read table that's included in your credit card package — easier for consumers to understand. To avoid surprises, read this package and the information before applying. Remember, each issuer will have different triggers for raising rates, applying penalty fees, and when to charge extra costs.
20. Review your credit card statement
Review your statement, regularly. Ideally, you can access your credit card statement online. If so, review the charges once per week. If that's too frequent, set up a regular time to review the charges on a monthly basis, particularly if you pay off your credit card balance with automatic bill payments. This review helps you track and monitor your spending — and helps you stick to your spending plan and budget — and it can help you identify unauthorized credit card charges or identify recurring payments for services you might want to cancel.
