11 Ways to Save Money Using a Credit Card

post author icon
by parag
Last Updated: August 1st, 2016
fb icontw iconli icon

KEYWORDS:#credit cards #tips #rewards #cash back
post image

Some people are afraid of credit cards but used responsibly,spending with a credit card rather than cash or a debit card can save you money! If are looking for ways to save while you spend, here are 11 ways to save money using a credit card.


1. Travel

Many of us love to travel and don't do it as much as we'd like because it can be expensive. But if you have the right credit card, travel can be inexpensive and sometimes even free.

A good airline card can help you accumulate points towards free flights, free lounge access (which means free food and drink rather than being gouged in the airport shops and restaurants), free checked bags, and even a rebate when you sign up for Global Entry or TSA Pre-Check. 

These programs give you expedited clearance through TSA screening and US customs. For some of us, time saved is even more valuable than money saved.  American Express will save you both. Certain of their cards will give you statement credits towards paying for these programs. 

A good hotel card can net you free stays, free room upgrades, and free perks like late check out or free gym access.

A good general travel card can save you money on all of the above and more; things like car rentals, cruises, and travel insurance. The right travel card can also save more than money; it can save your bacon if you run into something like lost luggage or a really long flight delay. Some cards also have coverage for things like accidental death or dismemberment and will provide referrals for medical and legal help while traveling. 

Car rental insurance is often covered when you charge the rental to a credit card. You don't have to pay for the rental company's pricey insurance. If you own a car that is insured, that policy may cover a rental car too but it's still worth charging the rental to a card that offers this protection as it will act as supplemental insurance.


2. Warranties

If you buy something fairly pricey like a new appliance it generally come with a warranty. If you want to pay extra, you can purchase an extended warranty. But with the right credit card, you can get that extended warranty automatically. Read the fine print, some credit cards will double the length of the manufacturer’s warranty. There are some exclusions to what they cover but many big ticket items are eligible. 


3. Price Match

Have you ever made a purchase and then seen the exact same item either go on sale where you just bought it from or seen a competitor offer it at a lower priced than you just paid? Instant buyer's remorse! But some credit cards will price match. 

The terms vary but if you see an item you have purchased in the last X number of days (usually its 90 days but not always) the credit card company will reimburse you the difference up to a certain dollar limit. 


4. Cash Back

Wouldn't it be nice if life were just a little bit cheaper? If you have a good cash back credit card, it can be. Some cards will give you a percentage back on all purchases; some have revolving categories which usually offer a higher percentage back than the no-category cards. 

Take a look at your budget and see if there is one area that stands out, groceries maybe or gas. Then find a card that gives you a good percentage back when you spend in those categories.


5. Transfer a Balance

If you have credit card debt, you know the interest rate is high. But you can lower that interest rate to 0% for a time if you choose a good transfer balance card. Look for one with a long 0% APR time frame, you can find them with introductory periods as long as 18 months. Be sure to check on any fees for transferring a balance too.

This can save you a ton of money in interest and allow you to climb out of credit card debt much faster than paying off a high interest rate card that you’ve fallen behind on. 


6. Get the Best Sign Up Bonus

If you're going to choose a new credit card, you might as well get a fat sign up bonus! Take a look at your priorities, air travel, hotel stays, or cash back, and find a card offering a generous sign up bonus for those categories.

Signing up for a new card at the right time can mean hundreds of dollars in free travel or in statement credits. 


7. 0% APR

If you have a relatively big purchase coming up, check out a card with an introductory APR of 0%. It's like free financing for your purchase without the hassle of a bank loan! Just be sure that the card has a 0% APR for purchases. Some only offer it for balance transfers. 


8. Not Your Problem

Have you ever lost your wallet? What happened with your credit cards? You just called the bank and they cancelled them and sent you new ones right? If there were any fraudulent charges, you were not responsible for them.

What happened to the cash that was in the wallet? It's gone. That's the problem with cash; if you lose it or it's stolen, it’s gone. If someone goes on a little shopping spree with your credit card, that's the bank's problem!


9. Special Offers

Some cards offer special deals through their websites. A famous one is Small Business Saturday from American Express. It falls on the Saturday after Thanksgiving and gives shoppers statement credits when they patronize participating small, locally owned businesses.

American Express also offers statement credits throughout the year for spending money at certain shops, restaurants, and events. Before your next shopping trip or dinner out, check on-line to see if your credit card company can save you a little money.


10. Fees

If you need cash, ideally you would go to a branch of your own bank to take it out but that isn't always possible and sometimes we're just too lazy and go to the closest ATM! That usually means that we get stuck paying $3 to take out our own money. Most places take a credit card so if you don’t have to spend cash, don’t! The transaction fee to use a credit card is paid by the merchant and not the customer. It’s also easier to track your spending when you use a credit card since you can see all of your transactions on-line or on your paper statement. 

Keeping track of the cash we spend is harder, we either have to note it down right away lest we forget or keep track of lots of receipts. No one has time for that! 

If you travel abroad and want to take out cash from a local ATM, you will not only pay a fee for using another bank's machine, your bank will charge you a foreign transaction fee. It's a small percentage, usually about 3% but that can add up!

As long as you charge purchases on a credit card that doesn't have a foreign transaction fee, you won't incur any fees for using a credit card. It's just easier too. It can be confusing to pay with foreign currency, especially if you don't speak the language and feel rushed.


11. The Big One

Your credit score is made up of six factors; payment history, credit utilization, derogatory marks, age of credit, number of total accounts, and credit inquires. The better your score, the lower rates of interest you are offered on loans for things like automobiles or a mortgage. One percent isn't a great discount on a new pair of shoes but it is a tremendous discount on a 15 year mortgage or ten year car loan.

If you have credit cards, they will make up a big chunk of your credit history so having them and using them responsibly can save you tens or even hundreds of thousands of dollars via lower interest rates across your life. 


A Financial Tool

Credit cards are a financial tool and like any took, they can be well used or ill-used. If you are paying interest each month because you can’t afford to pay off your balances in full, then any perks you get from using credit cards is going to be cancelled out by those interest payments.

But if you pay your balances in full each month, you can save money on everything from travel to groceries and even those interest payments with a good balance transfer card or a lower interest rate granted to you because of your high credit score. A good credit score and the right credit cards can save you money! 

fb icontw iconli icon