Credit card are often associate with bad debt. However, a credit card can give your credit history a good boost if you use it responsibly. Responsible credit card usage indicate to potential lenders that you are able to manage your finances, which means your credit risk is low. Not only that, you can use the card to give yourself a short-term, interest-free loan.

Here are 2 ways that you can use to make your credit cards work harder for you.

1) Get An Interest-Free Loan From Your Card

First of all, the method works well with low limit card, especially if the limit closely match your household expense. And all outstanding balance must be paid in full when the credit card statement arrived.

First of all, take stock of your monthly household expense. Assuming your household expense is $1000 per month, you can apply for a card with a $1000 limit or two cards with $500 limits each.

Assuming you have two cards of $500 limit, use one of the cards for recurring bills such as cell phone and auto insurance. Use the other for items such as grocery and gas for your car. The objective is to use the cards as close to its limit as possible.

This allows you to gain reward points faster as well as build a solid, positive credit record if you pay on time and in full.

Although this method also works for card with higher limit like $5000, the risk of getting into debt is also higher. Thus it is not advisable to do this if you do not have the mean and discipline to pay the outstanding balance in full.

So where do the interest-free loan comes in?

Simple. When you purchase with your credit card, you are not required to pay cash up front. Depending on the grace period of each card, you can refrain from making payment from 14 days to 60 days. During this period, doesn’t the money you have spent seem like an interest-free loan from the credit card company?

Take note of the payment due date for each card and plan your expenditure around them. As long as you pay your outstanding balance in full each month, you have much to gain and nothing to lose.

2) Use Balance Transfers To Your Advantage

This method require you to have a high credit limit and should be use for big-ticket item only. Basically, you are going to do short-term financing with your credit card.

For example, assuming you have an existing credit card with a $10,000 limit.. You purchased a second hand car for $8,000 completely on your credit card. At the same time, you apply for a new card with a similar limit and 1 year of 0% APR. After making one payment of $1500 on your existing card, you balance the remaining transfer of $6,500 to your new card. With your new card, you can pay off the remaining balance in full with 12 payments of $542, which is interest free. After that, the car is yours and you got no debt.

With some creativity and planning, you can really make your credit cards work hard for you. Not only you get to purchase the items you want, you are also building a solid credit history. As long as you pay on time and in full, the credit card is a wonderful tool in your financial arsenal.

Many people will head down to the local office of the banks or credit card companies when they want to apply for a credit card. If there is a long queue, they will have to wait in line for their turn to submit their applications. Alternatively, they can call up their customer service hotlines and request for an application form to be mail to their home addresses.

As more and more households have access to the Internet, the banks and credit card companies begin to offer online credit card applications. This method allows the banks and credit card companies to reach a broader base of potential customers, especially the younger generation that is more computer savvy.

Online applications offer several advantages over the traditional way of applications. Here are three of them:

1. Convenience

This is probably the number one reason why online applications are preferred over the traditional ways.  There is no need to travel to the bank and queue in long lines. Thus no extra time is wasted and there is no travel cost to deal with.

2. Access to a wide range of credit card information

Traditionally, if you want to review credit cards from different banks and credit card companies, you have to visit each of their offices separately or call up different hotlines to request for their application form. With the Internet, you can do it with just a few clicks. There are many legitimate online credit card directories that offer you detail description of credit cards from different bank and companies. Some of these online directories even offer free tips on credit card selection and management.

3. Shorter Turnaround Time

Since everything is computerized and automated, the processing of the application is usually much faster and more efficient. By simply clicking a button to bring up the application form, you can fill it up on your computer screen and then click another button to submit it. Unless there are issues with your credit history or errors on the form, you can expect to get your application approved in matter of days instead of weeks.

The main concern when applying for a credit card online is security. Contrary to belief, online application  is actually very safe and secure. The banks and credit card companies spent huge amount of money each year to ensure that their computer system is secure and hack-proof.

To have a safer experience, you should only make your online application from your personal computer. Avoid public places such as an Internet café. In fact, you should not be doing any high security transaction from any computer located in public places.

Online credit card application is safe and easy. Once you have experienced the convenience, it is unlikely you will return to the old ways of applying for a credit card.