How to Save on Credit Cards
Credit cards are today’s mans’ best friend and enemy. If properly managed, credit cards can be your lifesaver when times are tight.
Recent reports show that more and more Americans loved the plastic, which is popularly known as credit cards. As a matter of fact, there is at least one credit card in every household which comprises about 81% of the respondents. Credit cards are the top choice for their convenience in shopping and paying their bills.
The convenience of payment terms for credit cards makes them an indispensable tool for almost everything. Average balance of most American credit card holders amounts to $8,000. This is indeed, a great amount of debt.
Cutting back on your expenses and avoiding debts as you can, could save you money. Here are some tips on how to do that.
1. Choose the best credit card
With all the snail mails, emails, and phone calls from credit card companies offering you their plastics, there should be one credit card company that will suit your needs. Credit cards are not created the same and having this card will open to more controlled expenses, rewards, services, and interest rates.
For example, if you want to curtail your shopping expenses, get a card that provides limit in your shopping spree. This way, you will not be spending too much on anything beyond your credit limit, which will make your debts manageable to pay.
2. Go for the lowest interest rate
There are times that you will not be able to pay your bills on time but you are willing to pay your balances in another period. Find a credit card company that offers the lowest interest rates.
If you noticed, interest rates are the main culprit why your debts are soaring high. Interest rates are added in your actual balances making it worst to see.
3. Getting rewards by choosing the right credit cards
More and more credit cards are offering rewards to their patrons, but not all kinds of rewards will be beneficial.
For example, if your credit card offers a frequent flyer’s rewards and you are a frequent traveler, getting this card will give you dozens of discounts and accumulated points, some of which offer a ticket conversion for your next travel. With the rising cost of airline tickets, this is a great treat.
4. Keeping your list of expenses
You might be tempted to swipe your card everywhere but do not forget that every swipe you made holds a responsibility to pay in the future. Keep track of your expenses.
After a weeks’ recording, you will be able to identify that you have made purchases which are not actually important. The next time around, you know how to avoid it.
5. Avoid having balances
Try to clear your balances in your credit card statement each month as fast as you can. Accrued balances are carried over in the next billing cycle.
Although you are allowed only to pay a minimum balance, in the long run this will not do any good. As a matter of fact, it could only add up to more debts in the future. Remember, accrued balances will be subjected to interest rates. A zero balance will not be charged of any interest rates, thus saving you money.
6. Avoid cash advances if you can
Almost all credit cards allow you to make cash advances. But unless it is an emergency, you should avoid doing this. As you may know, cash advances on credit cards have higher interest rates than actually swiping your card on purchases.
Never combine these two if you want a debt-free life in a year. This is because most cash advances have shorter terms and will be charged immediately. This will be very hard in your part especially if you are now prepared to pay your balances.
7. Ask for a lower rate
If you have been diligently paying your bills on time, asking your bank for a lower rate might be fruitful.
According to one survey, around 55% from those who participated reported that they have successfully lowered down the interest rates by simply requesting the company to act consequently.
A lower-interest rate means a chance to save extra money, especially if you are a type of debtor who does not pay balances on time.
Those are the 7 proven tips which will help you cut back on your expenses and allow you to save more with your credit cards. It is now up to you to make your choice and act.