While there are plenty of financial professionals who discourage the use of credit cards, it’s important to reexamine that recommendation. After all, there are plenty of ways to save money through credit cards. Consider the following ways you can get started.
1. Credit Card Points
There are so many people who attribute their annual vacations, fancy hotel stays and luxurious spa treatments to their credit card points. When your credit card points add up, you can use them on a variety of purchases. If you have a credit card with a specific airline, use their point system in order to save up for a flight. Just by using the credit card on your usual expenses, you’ll end up accumulating points. There are tons of people who look like they’re buying all of these luxurious experiences when they’re actually talented at using their credit card points to their advantage. When you use the credit card points in the correct way, you don’t need to come out of pocket for that first-class airline ticket you’ve had your eye on.
2. Access to Increased Capital
An increased credit card limit can help you save money. When you have more capital at your disposal, you can leverage it when you’re ready to invest in a business or another profitable enterprise. If you need to buy a ton of inventory, you can use a credit card with a 0% interest rate that will allow you to pay off the balance within 12 months with no fees. When you have this type of deal, you won’t need to come out of pocket for your inventory. You’ll have plenty of time to make a profit off of the inventory. Then, you can use a portion of your profits to pay off the balance in full. This is what it means to save money and leverage.
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Improved Credit Score
When you have great credit, you’ll develop an excellent credit score. Your credit score will allow you to enjoy lower interest rates on mortgages and other major purchases. While you might not feel it immediately, a lower interest can equate to hundreds of thousands of dollars that you’ve saved in the long run.
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Cash-Back Privileges
There are plenty of cash-back programs that reward you when you use their services. The same concept applies to credit card companies. Each time you make a purchase at a certain location, you can earn cashback at the end of a monthly cycle. While the cash might not amount to hundreds of dollars, it’s still money you’re making because you’ve used the credit card to do so. Also, if you’re trying to carry yourself until the next pay period, there are cards where you can do a cash withdrawal if you’re in an emergency and need physical cash.
5. Balance Transfers
When you’re first working on your credit score, it’s not uncommon to deal with a high-interest rate. The goal is to eventually work on decreasing your interest rate. When you have a low-interest rate, you’ll spend less money on credit card fees. When you carry a balance on any credit card, chances are you’ll have to deal with those interest rates. When you transfer the balance to a different card, you’ll end up saving money on interest fees. Granted, you don’t want to carry a large amount of debt on your credit cards. However, when you can move and shift the balance around a bit, it will help you save money in fees.
6. Sign-Up Bonuses
When you have great credit, credit card companies will do almost anything to get you to sign up for their credit cards. They can rely on you to pay on time. That’s the perfect customer. In a desire to attract your business, there are businesses that will incentive the process by giving you a sign-up bonus. You can earn money just by signing up for their credit card. This is a great way to make some extra money. You can set that money aside in your savings account. You might choose to use it in order to pay for a vacation. It’s up to you. There’s nothing like earning free money.
7. Discount Days
If you tend to frequently shop at a specific store that offers a credit card, you might want to start utilizing the credit lines that they offer. Usually, the store clerk will ask you if you’d like to sign up for a card when you’re in the checkout line. You might want to say the next time they ask you if you’d like to sign up for one. This is because many stores offer discount days that are specifically reserved for individuals who hold credit cards with that particular store. If you’re someone who shops at the store on a consistent basis, you might as well visit during the days when they have discounts. You’ll save money on the purchases you were planning on making anyway. However, before you sign up, be sure to read the fine print. Know the interest rates and details before you sign the dotted lines.
If you’re someone who isn’t disciplined with paying off credit cards by their due dates, you might want to work on that area first. Then, as you become more disciplined with your spending and saving habits, use credit cards in order to leverage your financial portfolio.