Credit cards can indeed offer a convenient way to save money by providing cashback rewards on regular purchases. Many credit cards offer cashback rewards programs that allow you to earn a percentage of your spending back as cash, points, or other rewards. These rewards can often be redeemed for statement credits, gift cards, merchandise, or other benefits, giving you an opportunity to save money.
Additionally, credit card transfer to bank account can be useful when you need to access cash quickly or if you want to pay off other debts with the money transferred. This article talks about how you can save money and time while paying your credit card bills.
Tips To Save Money While Using Your Credit Card
Choose your card carefully
There are different credit cards offered by different banks. Due to this, it is important to do preliminary research before selecting the card. Different types of cards provide you with various benefits. Recognise your spending habits to determine which credit card is ideal for you.
Choose a card that fits your spending habit after analysing where you spend the most. For example, if paying utilities represents a larger portion of your monthly spending, choose a card that gives cash back on utility bill payments rather than offering air miles or reward points on every purchase. Likewise, consider a card that provides air miles if you only travel by plane frequently, as these miles can help you get a free flight.
Know the fees associated with your card
Each bank has different charges and fees with each type of credit card. Understand these policies before apply for credit card to prevent being penalised with late payment fees or higher interest rates. You can better plan your expenses by knowing the fees charged. If you need cash from credit card, make sure the fees charged is minimal.
Utilise your rewards points
Depending on your card’s policy, you may be eligible for rewards every time you make a transaction or make a credit card transfer to bank account. However, with some cards, these accrued points lose value after a certain time. Therefore, remember to use your reward points before they end to get the most out of your credit card.
Here are some instances of how you can use your reward points.
- You can receive a discount on your subsequent credit card statement
- You can get discounts on your subsequent purchases
- You can avail of cash reimbursements
- You can make reservations for lodging or travel
- You can redeem gift cards or merchandise
Repay your debts on time
You can be charged a very high-interest rate if your credit card payment is late. Paying your credit card bills on time should be a habit to prevent having to pay such fees.
Boost your credit score
Your creditworthiness is reflected in your credit score. Although it has nothing to do immediately with saving money, it still significantly impacts it.
Your credit score rises each time you pay off your credit card balances on time. Therefore, if you ever decide to apply for a loan, having excellent credit history and score allows you to do so with much lower interest rates. This in turn helps you to save a significant amount on the interest that might be levied when you convert your credit card bill into EMIs.
Refrain from utilising revolving credit
When you pay the Minimum Amount Due first and the remaining balance afterwards, it is referred to as revolving credit. Most banks offer this service to lighten your financial burden. However, the drawback is that it increases your costs.
When you carry over a bill, interest is applied for the full time it was past due. Therefore, even though it permits you to settle your bill in instalments, it raises interest costs. To keep them lower, pay your full amount on time and monitor your credit card spending as well.
Take advantage of promotional offers
Banks often offer promotional deals on balance transfers or purchases to help you save money. Read the terms and understand any fees associated with the offer before signing up.
Do not withdraw cash
Withdrawing cash from credit card usually involves a fee. This Cash Advance Charge (CAC) varies from bank to bank. In addition to this regular fee, the sum used is subject to interest. So, use your credit card for direct purchases rather than cashing out funds to prevent paying these fees.
Don’t max out your credit limit
Maxing out your credit limit can affect your credit score making it more difficult to pay off your balance. Keep your credit utilisation ratio (the amount of credit you use compared to your total credit limit) below 30% to maintain a good credit score.
Conclusion:
Credit cards have made life easier, especially with features like credit card transfer to bank account. However, using them carelessly can ruin your financial goals. Make an effort to use your credit card responsibly. This way, you can escape extra fees and make some extra savings on your transactions.