Do not be afraid to use your credit cards, they are a great tool, if used properly.

Make use of your grace period and billing cycles, meaning you can use your credit card and not pay interest on your purchases for about a month or two depending on when the purchase was made during the billing cycle.

Don’t forget to make money using your credit card.

That is correct, you can make money with your credit card. If you have built good credit as previously covered, you will begin to see great loan offers in no time. Companies often offer no annual fees and 0% APR on balance transfers and purchases for up to a year, sometimes even longer. What’s that mean? It means you are able to use their money interest free for an entire year! Of course you’ll still have to make a monthly payment in most cases, but it is still essentially a free loan.

Why not take advantage of this and invest the money in virtually risk-less CD or money market account. As of this date, banks are offering around 5% interest on CDs and certain online banks have money market accounts with over 4% interest. The difference between the two is in the liquidity of the account; a CD cannot be cashed out for an agreed upon period of time without penalties, while a money market account may be closed at any time.

So if you qualify for a $10,000 balance transfer, you could easily make 400 to 500 at the end of the year without much effort, simply by depositing the money from your credit card into this new account.

Note: Make sure you read your Credit Card agreement carefully to prevent any hidden fees for balance transfers.

Additionally, it may not be wise to invest in any other products or securities, such as stocks or mutual funds with your credit card since there is a greater potential for loss. With a bank insured by FDIC, the federal government guarantees your money for up to a $100,000 making your CD or money market account virtually risk-less; so stick with banks unless you are willing to lose your shirt and pants.

Collect points, get rewards and discounts.

If you are able to control your spending without using cash, utilize the points and discounts that you can acquire by using your cards. Some cards offer up to 5% cash back in points or actual cash when used for purchases of certain products. So the next time you pump your gas or buy groceries, use that Visa or MasterCard an wait for that end of the year check, coupons or flight miles!

Feel free to check it out! Just don’t abuse it’s simplicity!

It is clear that credit is a valuable thing, and it should be utilized to help one’s finances, but careful planning and self-control, if you will, needs to become a part of the picture in order to prevent problems that can very well be extensive.

Now that we have decided that credit is a great tool the question that comes to mind is how does one acquire it? Some have quickly realized that simply applying for a car loan or a credit card will not produce the results that we want. Banks and creditors do not lend money to just anyone; they, as any business interested in being successful, want to minimize risk by loaning money to trustworthy people. The key word here is trustworthy, you must prove that you are responsible before you can borrow anything. Your credit report is your reputation, based on which a company will decide whether giving you a loan is too risky. The problem many of us have is that we have no established track record, and as they say: you need credit to get credit.

So what’s anyone without credit to do in order to get a credit card? Start small and try to involve a family member if possible. The simplest thing to do may be to open up a joint account with your parents or significant other. But be careful, if their credit is not good to begin with, it certainly won’t help your cause. Their credit history will surely affect yours, and you only want to take advantage of it if it is good!

The other option is to start with a large retailer store card, such as a Wal-Mart card or Target. These places offer very little credit, sometimes as low as $200.00 but it may be the easiest place to start. You should get a card from a place where you do shop regularly though, as your card will be limited to this retailer, and to build a credit you have to use it. If you are in the construction business, you may want to go with Home Depot for example.

Make your regular purchases on the card, making sure you do not exceed the limit and you do not spend more than you can pay for with cash. As soon as your bill arrives, pay your card off right away. Paying it off will prevent you from having to pay interest and you will show the credit card company that you are responsible in your budgeting.

Continue doing this for a few months, after which you may likely receive an increase in credit from the lender.

Note: Be careful with offers for secured credit cards and membership fees. You do not need to spend any money on fees to have good credit and you shouldn’t. Never sign up for a card with annual fees, even with some of the extra benefits they are usually not worth it.

After a couple of months of using your card, you may apply for another card, preferably with a large national bank, that may offer you different credit products based on your credit. If you apply with a small bank with limited offers, you are more likely to be denied in the beginning, so look around and talk to the representatives before applying.

So why not just apply for as many credit cards as possible and see which ones will accept you? This is a trap that many people fall into, but the reality is that credit applications are not college applications. Each time a company looks at your credit report, a note of that inquiry is left on your report, and they do not go away for quite some time, often for for at least a year. Too many inquires will actually lower your credit score, because it is a warning to lenders that you are attempting to substantially increase your borrowing ability, which may signal risk to the lender.

After you get your new card, continue the same process of using it and paying it off every month. Buy groceries, gas and pay all your regular expenses, but again make sure not to spend more than you can actually afford. The point here is to build up credit so that you can get a bigger loan when you actually need it. Make sure, however, that your particular card does not have fees for paying off your bill each month.

Of course many of us, rely solely on cell phones, and no longer even use a land-line.  In that case, consider having a family share plan with as many friends and family members you can trust. With todays unlimited plans, the more people you add, the lower your overall bill will be. Just make sure these people will end up paying you on a regular basis if you are the one signing the contract!

If you work for a large national company, chances are you receive an employee discount. A good deal of these discounts apply at other companies through employee purchase programs. You can save a good amount when buying a car, computer or even on your cellular service. Make sure you inquire with your employer, many large retailers offer this benefit.

Apply for scholarships! Many of them don’t require much more than a name and an address. You would be surprised at how many go unclaimed or how many are given out to people because they were the only ones who applied!

Apply for credit cards that offer cash back or some kind of reward points. When it’s time to pay for tuition that you would have used your check for or your old man’s money, just use the card and pay it right off; at least you’ll get something out of your tuition fees.

Ask and look for student discounts! Being a student can often be an advantage when it comes to shopping, although it may not be as good as the senior discount!

Use free online banking with free bill paying services. Not only  does this help you keep track of all your expenses, you save money and time by sending your payments online.