7 Ways Credit Cards Can Save You Money

A credit card has become a necessity these days. As the most favored mode of payment for global e-commerce, credit card transactions have increased significantly over the recent years because of the pandemic. With a credit card, you can pay for your urgent online and in-store purchases even without cash. As long as you have the right attitude and financial knowledge, owning a credit card can help save you money.

Before getting your credit card, consider the points below to find out how these valuable cards can become your cost-saving tool:

1. Use Cashback Credit Cards

The cashback program provides a user with specific points that's as good as cash for every amount spent. For instance, your bank may offer you a one percent cashback for every USD$1,000 spent. If you can use your credit card exclusively to pay your USD$4,000 bills monthly, you'll earn USD$480 by the end of the year in cashback rewards.

"One of the better cash back cards on the market is Capital One Quicksilver, because they offer unlimited cash back without the rotating categories," says Scott Langdon, an analyst for CompareCredit.com.

So, before choosing your credit card, consider the perks that go with it. Also, make sure to pay off your balance on or before the due date.

2. Avail Of Zero Interest Balance Transfer  

One of the main reasons credit cards have a bad reputation is the high interest rates. The most common fixture in your credit card bills is the annual percentage rate (APR), which often represents the price consumers need to pay to access the privilege of borrowing money.   

Depending on the borrower's credit profile and the type of credit card product, interest rates could vary but average at 20.25%. APR for credit cards loans increases daily. Hence, if you have a substantial principal loan amount, you'll be left with rising interest rates, too.

To reduce your monthly interest fees, look for another credit card that offers zero interest rates on balance transfers. Because these offers are often for a limited time, make sure you're able to pay what you owe before the zero-interest term expires.

3. Take Free Hotel Stays And Other Travel Perks

Credit card products are highly flexible these days, and there's one that fits every user's lifestyle. Banks score partnerships with the travel sector and hospitality industry players to provide domestic and international travelers' perks. These cost-saving benefits translate through rewards points that a user earns while spending a specific amount of travel expenses, much like the cashback system. 

These points transform into virtual cash or percentage discounts to reduce airfare rates, hotel accommodation costs, or free travel-related products. Some cards offer free check bags, which is great for jet setters who don't want to travel light. These and other perks are essential factors to consider in choosing a credit card. 

Even if you don't have a specialty credit card, you can still avail yourself of discounted rates from partner establishments. For overseas travelers, some credit cards offer waived transaction fees, which means the three percent interest fees are waived for every out-of-the-country credit card transaction. If you're often abroad and run into cash problems, a credit card with this feature can be handy. However, to prevent fraudulent transactions, you need to notify and seek approval from your bank first if you want this activated.

4. Grab The Limited Zero-Interest Promo

If you're eyeing to make large purchases, wait until your credit card company announces its zero-interest-rate promo on selected items. The promo, often time-bound, may cover anywhere from the latest gadgets, state-of-the-art home appliances, or a ticket to your favorite vacation destination.

This zero-interest offer is a highly convenient and effective way to save money as you can pay for costly purchases for up to 36 months without paying interest fees. This highly tempting offer can save you up to a few hundred dollars in waived interest rates, depending on your purchase amount.

5. Take Advantage Of Special Discounts And Shop Rebates

Frequent shoppers also partner with small retail stores and companies to offer special discount days to specific credit card shoppers. A credit card holder may enjoy an extra five percent price discount or a rebate for every cash purchase during these special days.

This particular day may not happen regularly, so if you want to avail of these special offers, keep your eyes peeled for announcements or a list of participating establishments. Also, check how much you can save as well as the terms attached to the promo. Better yet, subscribe to your credit card's newsletter to get the latest updates.

6. Discover Price Protection Scheme

Not many people know this, but some credit card products offer refunds for price disparities. Also called price protection, your credit card company will issue a rebate representing the difference between the amount you paid for minus the lowest price for the same product.

For example, you bought a new mobile phone for USD$500 and charged it to your credit card. Within a few days of purchasing the phone, you discovered another merchant selling the same unit for USD$450; you can file a claim form to get the refund. Get in touch with your credit card's customer service to find out how to avail of this.

7. Check Their Sign-Up Bonuses

Because the competition can be intense, credit cards often come with numerous welcome bonuses for newly approved users. These benefits can range from hotel room payment discounts, free dining offers in selected restaurants, and shopping deals.

Some offer generous rewards and cashback discounts within the first month of use. At the same time, the rest provide gift cards that you can use in retail stores. Instead of paying in cash, sign-up perks allow you to hold on to your hard-earned money.

Final Thoughts

Owning a credit card can be a blessing as long as you strive to keep your balance clean on or before the due date. If you missed a single payment, you'd waste a good amount of money paying for interests and other charges. In addition, non-payment could mean you'll easily outvalue the rebates and discounts you've earned. So, make sure you can pay for your balance in total and refrain from splurging on luxuries that you can't afford.