Do you sometimes deliberately leave your credit card at home to avoid using it? Do you tremble in fear every time you swipe your credit card?
There are persistent assumptions that using a credit card will always put you on the losing end. However, finance experts and credit-savvy folks swear that you can actually save money using credit cards.
To Swipe or Not to Swipe
The question of whether getting a credit card is a smart move has always prevented people from fully enjoying what a credit card could bring. However, there are credit card programs that can actually help you save money. The key is to observe the prudent use of credit cards.
Obviously, when you unabashedly charge everything to your credit card without paying for your purchases when the bill comes, that’s when problems arise. It is your responsibility to be mindful of your credit card use and ensuring that everything owe is returned promptly.
If you practice responsible credit card ownership, then you can maximize its use and have a more rewarding experience.
Here are five tips and tricks that will help you save money by using credit cards:
1. Do your research before applying for a credit card
Don’t go into credit card ownership mode blindly. Make sure you do a bit of research to determine which one is the best for you.
One way to do this is to compare credit cards through a credit card comparison site. After you enter information regarding your preferences as to what benefits you want from a credit card, the credit card comparison site will narrow down the options.
It will then give you a side-by-side comparison of the cards that you have shortlisted. Advanced features of the site will even allow you to view detailed information about each credit card without leaving the comparison screen. What’s also convenient is that when you finally decide on the best card for you, all you need to do is press the ‘Apply’ button.
A credit card comparison site can not only help you with getting a comprehensive appraisal of the credit cards available in the market, but it can also lead you towards the one that will serve your needs the best. You also save time, money, and energy since you don’t have to go out and queue up. Instead, you can easily do so in the comfort of your home.
2. Don’t get too many cards
If you do not have steel determination and resistance against temptation, then it is best to avoid owning too many credit cards. If you’re a self-confessed shopaholic, for example, steer clear of credit cards so you can also avoid the risk of running into debt. Zero debt is still money saved.
Having too many credit cards will also prevent you from making full use of the rewards program of each card. Since there simply are too many cards to juggle, you just might be enticed to charge-up a storm only to claim rewards.
3. Don’t rely on credit cards for emergencies
It is still a better option to set up an emergency fund than just rely on credit cards for emergency expenses. This way, you can also avoid becoming debt-ridden.
Overusing your credit card for emergencies will also lead you to rack up a balance on your card. Keeping a balance on your card will also mean that you need to pay extra for interest. This will mean that it can be more expensive in the long run especially if you can’t resist swiping away every chance you get.
4. Take advantage of sign-up bonuses
Another wise move to save money is when you apply for a credit card that gives substantial sign-up bonuses. For example, there are credit card companies that offer 50,000 bonus points once you sign up. Those points can easily be converted to a good sum of money for travel or hotel stays.
Another sign-up perk that some credit card companies offer is having the annual membership fee waived. The annual fee can be a considerable amount that you can save, especially if the credit card you decide on is one that will give you a lot of benefits and usage advantages.
5. Maximize rewards
There are so many credit cards out there that offer a bucketful of rewards just to encourage you to sign up with them. However, you don’t need to be overwhelmed, especially when you use a credit card comparison site to finally arrive at a decision.
When you have carefully done your research, then you are most likely to optimize the rewards program of your chosen card.
If you’re a movie buff, for example, getting a card that offers free movie passes will already save you from having to shell out cash just to enjoy the silver screen. The same goes when you opt to get a card that can give you airline perks. This way, you save a lot on travel costs as well as get member treats such as free airport lounge access or get chauffeur-driven airline transfers.
Get More, Save More
It pays to do your homework when it comes to getting a credit card. Not only will it save you time and energy, but it will also save you from unnecessary expenses.
When you are being smart about your credit card use, then you also save money. Steer clear of having too many of them, avoid overusing them, and maximize your card bonuses and rewards for a more satisfying credit card experience.
Deepak Kumar is a Co-Founder of SoulWallet, a neutral comparison portal for consumer financial services. With a team of “out of the box” thinkers and a deep understanding of the UAE consumer banking industry, the company helps customers make the best choices when shopping for financial products such as credit cards and loans.