A credit card offers a lot more than just a convenient way to pay your bills and make online purchases. When you use it strategically for purchases and payments, you can earn free rewards, points, and many other perks to save money for a better lifestyle. Not only this, but consistent and on-time monthly payments also help you boost your credit score. However, you just need to follow two basic rules, 1) swipe your card for only what you can afford, and 2) pay off your full credit card balance every month. But if you use your card for unnecessary purchases or payments, monthly payments and interest can build a huge wall of debt for you.
Below are some tips to save money and make life easier with credit cards without building debt.
Look for a Sign-Up Bonus
When you need a credit card, don’t just get one without a signup bonus offer. This will help you earn free money in many ways when you apply for a new credit card. Sign up bonuses range from cashback, and discounts on purchases to free hotel stays and points that are redeemable to get something free. This may require you to spend a particular sum of money using your credit card within a mentioned period of time. If you meet that criteria and can pay off your bill, you should opt for a card with sign up bonus to get some extra money to buy your favorite stuff.
Pay With a Cashback Credit Card
If you pay several monthly bills and payments via cash, you should pay them all via your cashback credit card to earn free money every month. And then use the cash to pay for the credit card bill. For instance, if you spend $3000 a month on utility bills and other services, you can get up to $360 back a year if your card offers 1% cashback. In this way, you can save a lot of bucks every year to achieve your financial goals.
Balance Transfer to Reduce Interest
Getting a balance transfer credit card is one of the best ways to consolidate and pay off your credit card debt without paying interest. As balance transfer credit cards come with a 0% introductory APR period, you can transfer your balance of a high-interest credit card to your new card with a lower or 0% interest rate. This will not only give you enough time to pay off your balance but will eliminate interest (full or partial) as well. As a result, you can save hundreds of bucks in terms of paying no interest.
Earn Free Air Tickets or Hotel Stays
Travel reward credit cards are also available in the market that helps you earn free travel points or mileages that you can redeem for free flights or hotel stays. You can use those free flights for both personal and business purposes. If your card is not a travel credit card, you can use its discount mall to avail deals with mentioned hotels, travel agencies, or auto rental companies. However, you should check the details before you book a travel package using your credit card.
Some credit cards offer extended warranty benefits when you swipe them for gadgets or electronics. This helps you prevent expensive repairs so you can save a lot of bucks and get your gadget repaired free of cost. Extended warranty plans are expensive when you purchase them separately. But using your credit card you can get this benefit without paying an extra penny. Before you make a purchase, do check the fine print to see if you can get an extended warranty for an item you are about to purchase via credit card.
A credit card is a useful financial tool if you use it wisely. Before you apply for a credit card, you should compare available options and choose one that offers better value than others. Read the fine print carefully to see what benefits you can avail yourself using your credit card. Swipe your card only for what you can afford to pay off easily at the end of the month. Don’t carry a balance and make consistent payments every month on the due date.