Credit cards can be used for various things. They can be used to fund large purchases, like big kitchen appliances or car repairs. Credit cards can also be used for emergency purchases, like a medical bill that is not covered by insurance or to pay a repair company for work done on your home. But, have you ever considered using a credit card for savings purposes? It may sound a bit foolish to think that credit cards can save you money especially with the ability to rack up credit card debt. Read on to learn more about credit card savings and how to take part in the unbelievably easy task.
Determine Your Credit Patterns
An important aspect of credit card savings is considering how well you are able to handle having a credit card. Ask yourself a variety of questions to come to a conclusion. Some of those questions include, but are not limited to:
- What purposes do you use your credit card? Is it for emergency, large purchases, or for daily spending?
- Am I able to take care of monthly payments in full?
- Can I handle the terms and rates associated with the card?
- Am I able to control spending habits with a credit card?
If you are not able to keep up with monthly payments and your spending is at risk for spiraling out of control with a credit card, a credit card savings tip would be not to get a credit card at all. However, if you are able to handle payments and wise spending, then you have the ability to save with a credit card.
Take Advantage of Credit Card Perks
Everyone loves to be offered perks when enlisted in a new line of credit. An important aspect of credit card savings is taking full advantage of credit card perks. Credit cards commonly come with rewards that can be redeemed if the credit card remains in good standings, meaning no late payments and staying within spending limits. Some common types of credit card awards that are in accordance with credit card savings are below:
- Traveling Perks – These rewards typically come in the form of traveling miles. These miles can be redeemed at any airline, hotel, or any other venue that will take them. Instead of using your credit card to pay for the trip, allow the perks associated with your card to do the work for you. Pay attention to which hotels and airlines will be covered by the perks on your credit card and enjoy your traveling.
- Cash Back Perks – These types of perks give you rewards for spending money. If you have to use your credit card on daily purchases, take advantage of money-back rewards. Typically, cash back means getting back 1% of the purchases made on the credit card. Sometimes, that percentage goes up according to what items are purchases. Some of those activities that will increase the cash back reward percentage are putting gas in your car, restaurant dining, and even buying groceries.
- Retail Perks – There are a variety of retail stores that offer credit cards from their store. Those credit cards can be used for any kind of purchase at any other store, but using those cards specific to their store can give you deals and discounts on the store’s merchandise. For example, Wal-Mart offers a store credit card. If approved, you are eligible to use the card and receive a 20% discount on a large purchase. Be mindful of the possible rewards when asked to apply for a store credit card. You may be surprised by the perks you will be eligible to receive at the time of applying, and every time after.
Consider this tip: credit card rewards are a great part of credit card savings, but the tactic only works if you are receiving the rewards based on your spending. The more you use your card, the more rewards you will find yourself being able to enjoy. If your credit card does not include any kind of perks, whether it is traveling, cash back, or store rewards, your credit card is not benefitting you as much as it could be. Do thorough research on whatever card you want to apply for and make sure there are some rewards you can get by using the card.
In conclusion, credit cards can be a life-saving tool when it comes to needing money but not having the physical cash. However, an important aspect of credit card savings is to make your card work for you in more ways than just taking care of financial needs and not having to use actual cash. Remember that owning a credit card means agreeing to pay back what you owe combined with a percentage of interest. Make sure that your credit card works in your favor and not against you.