Having smart spending habits is a must when using a credit card to save or earn money and avoid building debt. When you use your card wisely to make purchases or payments, you can reap the benefits of special offers, discounts, perks, and 0% introductory interest offer. And you can do it without paying a lot of bucks in fees and interest. The rule of thumb is that you just swipe your card for stuff you can afford to pay off at the end of the month.
Whether you are a new user or swiping credit cards for years, here are some ways your credit card can save or earn you money while spending on day-to-day essentials.
Transfer Balances to Reduce Interest
If there is a huge balance on your card with a high-interest rate, you can save lots of bucks by moving your balance to a new credit card with a lower interest rate or 0% introductory APR. This gives you enough time to pay off your credit card debt without paying a single penny towards interest. Balance transfer credit cards are a great way to consolidate your debts and pay them off effectively at relatively lower or 0% interest. However, you should pay off your balance before the 0% APR offer ends. Otherwise, you will be paying a higher interest rate than your older card.
Pay With a Cashback Credit Card
Cashback is one of the appealing offers provided by credit card issuers to attract more customers. By using your credit card to pay utility bills or make online purchases, you can get a particular percentage of the payment amount back to maximize your credit card earnings. For instance, if a credit card offers 1% cashback on payments, you can earn $300 by spending $3000. Before you swipe a credit card to earn money, make sure to read the fine print and check the terms to enjoy the cashback offer without incurring extra charges or fees. Also, ensure to pay off your balance in full every month to avoid higher interest rates or building debt.
Free Travel or Hotel Stays
Some credit cards are best known to earn free travel rewards or miles that you can redeem for a free air ticket or hotel stay. Such cards are highly recommended for businesses with employees who travel often for business purposes. Even if you don’t have a travel card, you can still get the best deals on your credit card’s discount mall to save a lot of bucks while booking business trips or vacations. You can also get discounts on auto rentals using your credit card.
Look for a Sign-Up Bonus
If you are about to get a new credit card, look for one with a sign-up bonus offer. Credit card sign-up bonuses range from cashback to free reward points and free cash etc. The card issuer requires you to spend a specific sum of money in a given timeframe to get the sign-up bonus. If you can make hefty purchases using your credit card and pay the balance in full every month, then getting a card with an exciting sign-up bonus offer can help you earn and save money. You shouldn’t open a card just for the sake of getting a bonus. Because it can damage your credit score if you wouldn’t be able to pay bills in full.
No Foreign Transaction Fees
Some credit cards charge their customers 3 to 5 percent as a foreign transaction fee when they swipe the card for purchases in other currencies. If you are traveling abroad and using your credit card for payments, the foreign transaction fee can add up rapidly. But you can save those bucks by paying no feed if you have a card with zero fees on international transactions. Credit cards with no foreign transaction fee are a great way to save money if you frequently travel abroad either for business or personal purposes.
A credit card is a convenient payment method to pay for utility bills or make day-to-day purchases. Strategic use of a credit card allows you to save and earn money while you are spending on essentials. Using as lower available credit limit as possible, using the card for stuff you can afford, and paying the balance in full are some golden rules to use your card for good.