Contrary to popular belief that having credit cards can be expensive, credit cards can open a lot of opportunities for you if you use them wisely. Also, there are actually a lot of ways that you can practice for you to save money on your credit cards instead.
The worst thing you can do to your savings is miss a credit card payment deadline. Interest rates are absurdly high, and you will even be charged with late payment fees. Moreover, having such record will stain your credit history with the credit bureau. This will cause your future loans or insurance applications to also have high rates. If not, it will be more difficult for your application to get approved.
Also, you should try your best to pay your dues in full. Credit card companies will charge you with higher interest rates compared to most types of loans. If you are going to purchase something expensive that you cannot pay for within the grace period of your credit card, obtain a different type of loan to purchase it instead.
When reading the terms and conditions of your card, make sure that you don’t skip parts. Knowing the terms will also save you from hidden charges that you may not be informed about. The terms and conditions will also tell you the true costs of having the credit card, such as the fees you have to pay for missing a payment, annual membership fees for using the card, how much you really have to spend in order to earn the rewards, and the like. Although some terms may appear to be a little long, reading and understanding them will save you a lot in the long run.
The most tempting of all are the reward credit cards. When it comes to credit cards, rewards may not always be a good thing, especially if it makes you spend more than you usually would. So if you are not able to pay your monthly balance in full and end up accumulating interest charges, you are better off with a no-rewards credit card instead.
Another way you can save is to have multiple credit cards to avail of specific benefits. For emergency purposes, use one with the lowest interest rates even though it might lack other features. For your daily expenses, choose a rewards card that will let you earn the things you like for free, and one that you can pay monthly in full.
Once you’ve built a good relationship with your credit card company, you can also call them up and ask for lower interest rates or annual fees. With thousands of customers doing the same thing, this isn’t something new to them. Credit card companies spend a lot in their marketing and advertising campaigns just to get new clients. So if you have been a loyal, prompt-paying customer, this will usually work.
Even if most credit cards have cash advance features, only use this if you are in dire need. Cash advances usually have high interest rates, one that is usually equivalent of missing a payment date. |
