When it comes to credit cards most people don’t think about saving money. As a matter of fact, most apply for credit cards with the intentions of spending money, not saving. Unfortunately, we have all either experienced first hand or heard the horror stories about irresponsible credit card use and how credit card debt can be extremely hard to recover from. Credit card debt can do a number on your financial security and even ruin your credit. The good news is this doesn’t have to be your experience with credit cards. If used responsibly, credit cards can actually save you money. That’s right, credit cards can be one tool within your financial portfolio that can save you money. This article will highlight three different ways that credit cards can save you money.
Balance Transfer
At one time finding a good balance transfer offer could be a challenge, but today the offers are readily available. There are numerous 0% balance transfer offers on the market today. A balance transfer offer is ideal for those that already have a balance on a credit card and especially those that have a card with a high interest rate. For example, you might have a credit card with a balance of $1,000 and an APR of 19%. You can save yourself some money by avoiding that 19% by transferring your $1,000 balance to a card that has a 0% balance transfer offer. Each 0% offer has different terms and conditions and as long as you abide by the “rules” you will get the 0% rate. The way a balance transfer offer works is that you will have a predetermined amount of time in which you must pay the balance off in order to receive the 0%. For instance, the offer might state you receive 0% on balance transfers for 15 months. This means you have 15 months to pay the balance off at the 0% rate. If you don’t pay the balance off then you will be charged interest on the remaining balance. If you decide to take advantage of a 0% balance transfer offer here are some things you should not do in order to reap all the benefits of the offer:
- Do not only make minimum payments
- Do not miss a payment
- Do not go over your credit limit
- Do not allow the offer to expire without paying the balance off
It is very important to understand all the terms and conditions of the card offer. If you don’t understand the agreement then you might forfeit the offer and not even realize it. It is common for offers such as a balance transfer to be taken away if you miss a monthly payment. This type of information is contained in the terms and conditions of the card agreement.
Reward Programs
Another great way credit cards can help you save money is through their rewards programs. Many credit card issuers are offering their cardholders a reward program with the goal of encouraging the credit card holder to use just one credit card to make their purchases. There are a variety of cards that offer different types of rewards programs such as Points Rewards Credit Cards and Miles Credit Cards. Points rewards credit cards allow cardholders to earn points based on their purchases. It works similar to a cash back card, but instead you earn points. These points can then be redeemed for travel, purchases, or even statement credits and cash. Many of the points credit cards also offer bonus points for new card applicants as a way to make the card more appealing. Airline Miles Credit Cards also reward their cardmembers for making purchases, but do so with airline miles. The best airline miles credit cards enable you to earn frequent flyer miles with every purchase. The card holder can then cash in the miles they have earned for flights. Many of the miles credit card offers come with bonus points that allow you to earn a free plane ticket very quickly.
Promotions and Bonus Offers
Finding a credit card that offers a sign up bonus can save you money right from the jump. Many cards have bonus offers to make their card most appealing to consumers. Credit card companies are offering more and more of these bonus offers to new cardmembers and right now there are numerous great offers you can take advantage off. We often see a competition among the card issuers to see who can offer the best bonus. There are cards on the market today that offer new cardmembers $500 cash back just for signing up and spending a certain dollar amount on the card within a specified time frame. This is a quick and easy way to earn some extra money in your pocket. Currently, the Chase Sapphire PreferredSM Card will earn 50,000 bonus points when spending at least $3,000 within the first three months. Those points can be turned in for a $500 statement credit OR a plane ticket worth up to $625.
No comments yet.