Credit Cards: How To Use Them To Save Money

Thu, Aug 2, 2012

Financial Advice

Did you know that you can actually save money using credit cards? We have all been warned about the accumulation of debt and how expensive a credit card can be. However, if you use it wisely, your card can actually help you save money rather than rack up debt. Here are three tips to help you use your credit card to save money.

Choose the right credit card for your situation

Not all credit cards are created equal. Make sure you shop around to not only get the card with the best interest rate, but one that best fits your situation.

For example, some creditors will offer incentives to entice you to sign up with them. If you do a lot of traveling a credit card offering frequent flier miles might save you a lot of money. On the other hand, if you don’t do a lot of traveling and carry a balance on your card each month, a rewards card may not be the best fit and a low interest rate may be more beneficial to you. So be sure to look at the total costs and benefits of each card before making your final choice.

Use your credit card to save money and earn benefits

Many rewards cards offer perks such as insurance, frequent flyer miles and bonus points that can be redeemed for goods and services at leading department stores and restaurants. If the rewards being offered are something you already spend money on, you may be able to use your credit card to save on these goods and services.

Timing is everything

Pay your credit card on time each month to avoid paying late charges. If you do carry a balance, try to pay your bill early to save on interest charges. Also keep track of your billing cycle. If you earn interest on money in your bank account, you can take advantage of the fact that you can buy something with your credit card and not have to actually pay for it until your credit card bill is due. In the meantime your money can be earning interest in your bank account. Remember timing is everything when it comes to saving money with your credit card.

When it comes to using credit cards, you definitely need to be careful. Otherwise you can end up with a lot of debt. However, if you use it wisely your credit card can help you save money on goods and services, earn extra perks for your family to enjoy, and even help you earn interest rather than cost you. You can begin to put these tips into action right away and start reaping the benefits as early as today.

About the Author

Carly Lance is employed by Personal Bankruptcy Canada, a company dedicated to helping “good people with bad debt”. She also thinks of herself as a personal finance junkie and loves to blog about saving money, frugal living and getting out of debt whenever she can. She believes a happy life = happy finances.

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