Retire Young and Wealthy

Individuals own credit cards for a variety of reasons. Some enjoy the security afforded with instant access to emergency funds, some use them to finance large purchases and some use them as a short term financial solution in between paydays. All of which are perfectly legitimate and respectable reasons to own and use a credit card. However, my personal opinion is of the contrary- you should use your credit card as an empowered user and not base any of
your day to day financial reliance on them. Instead, dear reader, you should use your credit cards to get paid, to collect incentives, to win points, get discounts: anything that put’s you, the user, in a stronger financial position.

So, I hear you cry, how do we go about becoming empowered credit card users? Well, the answer is actually a lot simpler than you may first think. You pick a credit card that rewards you for using it instead of penalising you for using it. What I mean by this is that you should find a credit card that offers incentives. Something like the Avios Credit Card that awards air miles or the American Express Card that offers cash back or the Shell Petroleum card that offers fuel points.

Before you pick your card you need to create a plan for maximising the gains you can take out of the credit card without incurring any penalties like interest on the balance or late payment charges. The best way to do this is to find a card that suits your personality that you can easily integrate your daily habits and purchases.

Top Tip: Remember to set up a direct debit from your current account to pay off the balance of your card in full every month. This will stop you incurring any interest payments.

If you are a regular traveller then a card that would fit into your lifestyle would be the Lloyds TSB Avios Duo Card. This card allows for you to collect
“avios points”, formally known as Airmiles that can be used on a variety of flights, holidays, days out and even electronic gifts and cases of wine. This card also lets you swap points from other schemes, like Tesco Club card points, into Avios points. Therefore, you can effectively use your year of grocery shopping to buy you a ticket to an exotic destination of your choice. Not bad, eh?

If you are not much of a traveller and prefer to just get some cold hard cash back at the end of the year then opting for a card such as the Santander Cash Back Credit card will pay you back 3% of your balance. Strangely, due to the worldwide recession interest rates from regular current accounts do not reach 3%. Therefore, if you are a savvy, empowered credit card user you could earn back a couple of hundred pounds over a year for just using your credit card to pay for your fuel and groceries every month, which is more than a standard current account would offer. Again, to benefit from this scheme you need to pay off the full amount of the card every month or the interest will cancel out the gains you make.

If you like a simpler way of benefitting from a credit card, it would be best to look into some stores that you frequently shop in. For example, if you regularly buy books on Amazon you can get a discount by using the Amazon credit card to make your purchases. Or if you shop in Tesco on a regular basis then you can collect additional club card points when you use a Tesco club card.

There are many great options out there if you a looking into becoming an empowered credit card user. However, it is important to remember that the most important actions you take to become an empowered user are organisation and research. Make sure you sort out your repayments and know the rules of each card inside out. After you have this knowledge you can effectively game the system to only get benefits from your card.