Credit card tricks to save money

Credit card tricks to save money

You can use your credit cards to save money. Here are some money-saving tricks on credit cards to consider:

Stop paying interest

Earning as many rewards as you can mean nothing if the rewards you earn are offset by the accrued monthly interest charges.

The most importantly professional advice we can recommend is to pay all your charges in full each month. If you do, the interest charges will never be applied to your balance. These charges only apply at the end of the grace period, which is the period after the close date of a billing cycle before interest charges are applied. By starting and ending each billing cycle with a zero balance, you’ll enjoy all the rewards of credit cards without the typical cost of credit cards.

Evan Sutherland, the co-founder of Budgeting Couple, notes that by putting your credit cards in automatic payment, your statement balance will be paid in full automatically each month. This simple trick will force you to use your cards wisely and not spend more than what you have available. It will also prevent you from losing money by paying credit card interest or receiving late fees if you forget to make a payment.

If you’re too nervous to put credit card bills on automatic payment, at least make sure to set reminders at least to make sure you don’t miss a payment. Missing a credit card payment not only means you pay more, but it can also cause your credit score to drop if you are more than 30 days late on your credit card bill.

Don’t pay annual fees unless they’re worth it

Difficulty level: Medium

Some of the best reward cards with the biggest sign-up bonuses have annual fees. This is a fee you pay each year to keep your account open and in good standing. If you’re paying an annual fee on a card you don’t use, you’re wasting money.

FinanceBuzz’s Brandon Neth explains that some cards have fees that are simply not worth what you can earn.

“An example that comes to mind is Luxury Card, their cards look amazing, but they have great annual fees and offer much less than cards offered by other issuers, such as Chase or American Express,” says Neth.

Before deciding to sign up for a credit card with an annual fee, take a look at the rewards it offers and calculate what you can earn from it. Remember by calculating this, you don’t want to change your spending habits for more rewards. Only get the card if you think you will naturally spend and earn enough to justify the cost.

Treat your credit cards like any other investment. Do your research and only do what is comfortable for you, “advises Neth.

Every year, you need to evaluate your spending and rewards on the cards you have that carry annual fees. If you see that you have a card where the fees are not justified by the rewards, it may be time to consider closing it.

Use balance transfers responsibly

RJ Weiss explains that balance transfers [ENG] can be a boon when you have a troublesome amount of credit card debt. Making a balance transfer from a higher interest rate credit card to one with a 0% promotional offer can save you a lot of money and help you eliminate your credit card debt faster.

Weiss reminds cardholders that balance transfers only work to your advantage if you pay attention to the terms (how long that 0% rate will last and what the fees are to transfer a balance to your new card) and as long as you avoid accumulating more debt on the card you just released.

By aamritri

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