Ways to Save Money with Your Credit Card
Credit card use and debt usually go hand-in-hand. For the responsible few who understand how to use credit cards wisely, they can actually be a great tool in your personal finance arsenal. When you learn how to use your credit card responsibly and in conjunction with other smart money management strategies, you can avoid debt while establishing a strong history of good credit. The following tips can help you save money using your credit card while reducing costs associated with credit card use.
Read the fine print
Most consumers get in trouble with credit cards by not knowing or understanding the terms and conditions to which they agree to be bound. You should know exactly how charges, payments and other transactions will be handled before you apply for a credit card. There may be annual fees, maintenance fees and fees to set up the account which will be applied before you even receive the card in the mail. Look for these fees before applying to avoid starting out with a balance.
Also know the interest rates and how much it will cost to use your account. This includes late fees, cash advance fees and balance transfer fees. While all three of these credit card fees can be avoided, if you want to save money with a balance transfer credit card you will likely have to pay a fee. The best credit card offers for these transactions charge low fees of 3%, so look for this before applying.
By taking the time to read and understand the terms, you can prevent surprise expenses later.
Mind your payments
The best way to avoid additional charges, fees and interest charges on your account is by paying the account in full each month. This practice will not only prevent the accumulation of debt but also help in establishing excellent credit. If you already have a high balance or are unable to pay the entire amount in full, you can still save money by making timely payments. Late payments will hurt your credit score and cost you extra money in fees.
Get rewarded for what you already do
If you are going to use a credit card, you might as well get something out of the deal. It is important when selecting a rewards card to carefully review how the program works and what actions are required to not only build up rewards but also to claim them. There are so many rewards programs available, it may seem impossible to compare them all. However, the process isn’t as daunting as it may seem.
First, you can begin by reviewing how you use credit and what type of rewards benefit you most. If you fly once every five years, frequent flier miles really aren’t going to help you. Cash back credit cards like Capital One Hassle Rewards are a popular choice because all users can benefit and the rewards are easy to redeem. Like all other aspects of your credit card, make sure you know all the rules and mind your p’s and q’s to ensure you get the most our of your rewards card.
