Can it be said that you have a casual relationship with your credit card? Is it your ultimate gear when you go shopping, as some have opined? Can it even be said that your credit is your best friend when you go happily shopping? If the answer to any of these questions is yes, it may be time fore you to re-evaluate your relationship with that plastic temptation.
Considering the economic conditions these days, this plastic seems to be the least practical option for anyone serious about saving money. It is actually the most convenient tool used for consumption when you are out of cash. It lures you to spend, which is precisely the reason you should modify your relationship with it. You don’t have to totally break off the relationship, but be a little smarter and make it work to your advantage…
…Because there may be a few ways for your credit card to be useful in your saving endeavors. In fact, here are a few ways that you CAN actually save money with that credit card:
0% Balance Transfers
If your present credit card has a high interest rate, you can transfer your balance to one with a low-interest or no-interest at all. It can offer you a 0% interest for a certain period and then a lower regular rate later on. A 15% interest rate can be transferred to one with 6%. The 9% difference means a lot, especially in the long run.
Lower Interest Rates
Look for one with the lowest rate of all to further maximize the use of a credit card. This definitely spells savings. If you do not have a balance yet, it is best to look for a card without annual fees. This is one way you can take extra precautions in assuring that the lowest interest rate is the best for you.
Make sure to factor in your buying habits. You may be attracted to the low rates, but the end result may not be desirable if annual fees and other hidden costs are attached to your bill.
Reward points system and cash back programs offered are also ways to get the most use out of your credit card for less. Simply put, these programs can save you money. Maintaining a low balance despite your frequent buys will give you at most 5% off on purchases.
There are even cash rebates up to 5% when you use the credit card at certain gas stations, convenience stores and groceries. This can be automatically applied to your bill, which results in more savings you will be realizing.
Maximizing the Experience
To reap the rewards, you must avoid the drawbacks. Let prudence be your guide because the prudent person will definitely look for the best deals and grab them right away but with some caution. Thus the necessity to read the details.
Check the fees that may be charged and the penalty rates in case you delay. This may be the downside of the deal offered to you. For example, be careful of cash advance features of credit cards. Some of them can be very expensive. They can come with numerous fees and higher rates. So be wary! Spending cannot be avoided at times. Just don’t forget your goal of getting a good deal to save.