Many articles discuss the dangers of credit card debt, which is a valid topic. However, we’d like to offer another side of the credit card. Did you know that they can save you money? Yes! These plastic cards can save you money when you use them correctly.
We’ve put together a list of ways credit cards can save you money.
1. Cashback
there are many cash back credit cards available these days. Many of them allow you to earn anywhere from 1-2% on your purchases. This is a great bonus without having to do any extra work; however, you can find even more savings on some cards.
There are credit cards that offer a higher percentage back when you make purchases from their online store. To earn the cashback, the cards may require you to spend in specific categories through a period of 12 months. Categories may include groceries, restaurants and more. Each card of this type will work a little differently, so read through the terms and conditions to understand exactly how the program works.
2. Free Checked Bags
Airline cards may offer free checked bags. That’s a great bonus! Have you looked at the cost of check a bag these days? With a free checked bag, you’ll save quite a few dollars.
In addition, some airline cards checked bag programs may allow you to check your own bag and the bags of anyone traveling with you on the same reservation. For example, a family of four traveling on vacation would save money on each leg of the trip, with a round trip savings of several hundred dollars, just for their checked bags.
3. Balance Transfers and 0% Introductory Rates
Many credit cards offer great rates on balance transfers, while other cards offer a 0% introductory rate. How does this save you money?
If you find a credit card with 0% interest on a balance transfer for 24 months, and on purchases for 12 months, you won’t pay interest while paying off your purchases before the no-interest period ends.
In addition, if you have another card with high-interest rates, you can transfer this card’s balance to the new card and save money, too. However, you may need to use a service like Credit Cards Compare NZ to determine which credit card vendor provides you with amazing money-saving options.
4. Sign-up Bonuses
Some of the financial institutions offer sign-up bonuses for new customers. The bonuses are usually in the form of flier miles. These miles are still a great way to reduce the cost of flying.
The goal here is to find a credit card with a high sign-up bonus. You’ll find that the card may require that you spend a certain amount of money by a specific deadline. If you can manage this, you’ll earn the sign-up bonus miles. Then you can use these miles toward a flight to the destination of your dreams!
5. Extended Warranties
many credit cards offer extended warranties on purchases made with the card. You save money by not having to buy the in-store extended warranty, which can be quite expensive.
Many cards may offer to double the manufacturer’s warranty, and even offer an extra year of coverage.
6. Raise Credit Score
when you actively work to pay down your card and pay bills on time, this has the effect of raising your credit score. This also makes you look financially responsible to banks and other financial institutions.
In fact, having a high credit score may even help you get lower costs on loans. Excellent credit can help, for instance, when taking out a mortgage on a new home. The higher your credit score, the more it can help to reduce your loan payments each month.
8. Price Protection
some retailers offer price protection on their products. For instance, if you buy an item at one retailer, but find the price on the same item lower at a different store, then the first retailer will refund the difference of your purchase. Some credit cards offer the same benefit.
This benefit varies depending on the card, but they usually work the same as the example above. The card you are using will refund the difference on a purchase if you find a better price. There may be a specification on the time period for which they’ll pay. For instance, some cards stipulate the better price must be found within 90 days of your original purchase, while other cards have a 60-day cap.
The credit card may also require that you provide proof of the better price. This can take the form of an ad or something similar.
9. Car Rental Insurance
Car rental insurance can be expensive; however, you can avoid this expense with some credit cards. If you book with the card, then they’ll cover the car with their own insurance.
You’ll want to pay attention to exactly what the credit card’s rental car insurance plan covers. For instance, coverage of some cards doesn’t include liability, personal injury or damage to a third party’s property. Again, this varies by card, so be sure to read through the terms and conditions to find out what the credit card rental coverage includes.
When used correctly and responsibly, credit cards can bring many benefits including saving money on everything from flights to lower mortgage or loan payments, and even cash back on purchases.
