A credit card can mean different things to different people. While on the one hand, it might be a way of spending money without having to worry about paying immediately, for some it might be a way of getting rid of bad credit temporarily, and for some, it might all about the rewards for free travel.
But whatever the reason for getting a credit card, in most cases, they just turn out to be a tangled mess if you aren’t cautious about your spending habits!
When you’re all nonchalant with your expenses, you’ll end up with a credit card with bad credit, which is no one’s ideal situation. You get a poor credit score when you fail to pay off the credit bills on time and keep accumulating them. This, in turn, means having a hard time borrowing money at a low interest rate and waving goodbye to the chance of getting better credit options.
But things don’t always have to be that way. With the right tricks and good financial habits, you can make the most out of your credit card and even get some extra cash flow! So here are five ways to save more money using credit cards.
Apply For A Credit Card That Offers A Sign-up Bonus
All we see when we think about credit cards are the long bills after impulsive shopping sprees. If you are a frequent patron of retail therapy, why not apply for a credit card that gives you a sign-up bonus?
Many credit cards offer first-purchase bonuses, often in the form of reward points. By building up enough points, you can take advantage of some great deals and offers.
A few credit cards give you travel bonuses when you spend a certain amount in a set period of time. In some cases, they might give you a cashback as well, but to avail this you must have an excellent credit score.
Make Payments With A Cashback Credit Card
As the name suggests, a cashback credit card helps you get money on every purchase you make. When you make payments or shop with these cards, you receive a cashback of at least one per cent refunded in your account.
Although one per cent seems like a small amount, you can easily call it free money to some extent, because it’s almost like someone is paying you for spending. And depending on the cashback rate, you even stand to make a little extra money!
Earn Free Travel And Hotel Stays
Free travel? Yes, you read that right!
Many credit cards give you enough rewards for you to utilise them for free travel. Even if you don’t qualify for free travel, at the very least, you can earn enough points to considerably reduce your travel expenses by saving on flight tickets and hotel stays.
Now, to be able to avail such deals, you need to choose the right credit card – something that offers you high rewards on something you purchase frequently. For example, a credit card that offers you rewards every time you fill up your car, so whenever you purchase petrol, you will get reward points.
Further, you can apply for a credit card that offers you the best travel rewards. These cards usually have an annual fee, but this fee is barely noticeable.
Make A Big Purchase With 0% APR Cards And Watch Out For Price Drops
We’ve all been there before – we buy something this week, only to find out that the price has dropped the next week. Regrettably, there is nothing we can do about it. But then again, with 0% APR cards, you can get a reduction in the price of your interest rates.
Some credit cards come with a 0% annual percentage rate (APR) for a particular time period. What this means is that your credit card company won’t charge interest for the prescribed duration. So if you have plans on making a big purchase, your best shot at saving more is getting yourself this card.
Although these cards only offer 0% interest in introductory purchases, you will be charged with interest payments due once the stipulated time is up, so stay vigilant. Be sure to pay the balance off by the end of the term. Note that you will still have to make your monthly credit card payments.
Transfer Balance To Escape High Interest Rates
In some cases, you might find yourself up to the neck in debt and in need of some time to pay it off. These inopportune moments are when you find yourself surrounded with the stress of paying high interest.
A way out of this is to transfer the balance to a credit card with a lower interest rate. Or, if you are lucky, you can make use of the introductory APR period, where you can transfer your ongoing balance to credit with 0 APR and pay back the debt within the stipulated time at 0% interest. At the same time, you need to be cautious because there is almost always a catch when it comes to credit cards.
It is extremely important that people understand the responsibilities that come with a credit card. One will do well to remember that most of these advantages are accessible only to people with an impeccable credit score, which is earned over time with prompt payments and responsible spending.
People often get enticed with the starry perks of credit cards and don’t use them responsibly, ending up neck-deep in debt. Just in the pursuit of earning reward points, people tend to go overboard with their expenses and don’t realise the seriousness of the situation until it’s too late.
So, for all intents and purposes, you must always have a backup plan to remain in comfortable financial stability. One of the best ways is to have a safety net loan that has your back when you need it.
All in all, the most important part must be reiterated: work towards building your credit score to have a better chance at all these perks.