Credit cards have already made our lives easier by providing us a convenient way of payment and providing a credit limit that allows us to spend more than we actually own. This borrowed money can be repaid later in instalments in a given time frame.
Regardless of paying an interest after the due limit has passed which actually turns out to be more expensive than the initial borrowing, credit cards can actually be used to save money.
Yes, you read that right! Credit cards, when use efficiently can help you save money. Here are some easy ways to achieve that.
1. Research for the best credit card
There are many different credit cards’ categories offered by banks to cater to the distinctive needs of various segments of the target audience. Hence, one must research for the best credit card that will suit his/her everyday needs.
2. Use credit cards with redemption rewards
Many credit cards offer reward points on spending and making payments when used. These points can be redeemed at particular shops or stores or even luxury brands depending on the bank’s offerings.
3. Pay quickly to avoid interest payments
Credit cards give you the leverage to go for worry free shopping and spent more than you actually own. The borrowed money should then be paid later. However, paying after due date will lead to interest accumulation that will instead make the initial borrowing more expensive and then you’ll be left with regret only. Therefore, payments should be made soon as possible to avoid doubling of repayments.
4. Avoid having too many credit cards
This is a psychological fact that if you have the opportunity to spend more, you will definitely spend more. Hence, do not give yourself the excessive leverage to spend as much as possible. Avoid having too many credit cards because more credit cards will mean higher credit limit and an increased probability to spend more. Hence, limit your scope with using the credit cards only when needed.
5. Transfer your current balance to a lower interest rate credit card
If you have accounts in more than one bank, you may transfer your credit card balance to be paid from a bank that charges higher interest rates to the one that has lower interest rates. Many banks offer this transfer service without any charges. This will help you to cut down on additional costs to a great extent.
While the term ‘credit’ may be taken in a negative connotation, there is a flip side for it as well. Every product has its own benefits and limitations. What we can do as consumers is to maximise our utility by taking advantage of its positive features.