When you are credit savvy you are able to use your credit card to benefit you so that you can save money even whilst you are charging on credit.
Here is how you are able to save money through credit card use.
Consolidate your Credit Card Debt with Care
A common strategy that consumers use to trim what they owe on cards is to use balance transfer credit cards that have a 0% or low APR on the balance that is moved for a limited time.
You will need to perform a cost benefit analysis before you choose this plan as most cards have a balance transfer fee. You also need to make sure that you are able to pay off your consolidation debt completely before the promotional period ends.
Use Rewards Cards if you Can Pay in Full
Rewards are great, but in order to offset the rewards, the reward credit card will usually have a higher interest rate. In order to make the rewards work for you, you need to be sure that you can pay your balance off in full every month. If you cant then a lower interest card might be a better choice.
Pay More than the Minimum
Having good payment habits is vital with a credit card. By doing this you will be able to avoid high finance charges and penalties. It is always best to pay your credit card balance in full and if you are not able to that then you need to pay more than just the minimum, as this will save you money on interest.
Always Research
Before you sign up for anything you will need to compare credit card offers.
Too Many Cards
You shouldn’t collect rewards cards as having too many could prevent you from optimizing your rewards on any card. Also when you have too many cards you are more likely to spend more then you should or can afford.
Don’t Rely on Credit Cards for Emergencies
If you don’t have any savings then an unexpected expense will end up on your credit cards and having a balance means you will pay extra interest. This means that relying on your credit cards will be great expenses in the long run.
Have a Spare Card
If you are interested in taking advantage of rewards then you can own one, but only use it on items that you know you are able to pay of in full in every month. You can then apply for another card that has a low interest rate as this card you can afford to own with a balance.
Ask your Card Issuer to Lower your Rate
If you have a good history as a card member then you may have some leverage. When you have been a customer for a while, then call your card company and discuss if they are willing to give you a break on the rates.
