When you think of saving money, you might automatically think of things like cutting out coupons, hunting down elusive codes, or scoping out the latest deals. But did you know that you could save money with your credit card? If you’re a deal-savvy consumer, choosing the best credit card for you could mean saving money in a variety of ways. Here are four ways credit cards can save you money:
1. Cash back savings
There are certain rewards credit cards that offer cash back on all purchases. For example, the Chase Freedom card offers one percent cash back and the Citi Double Cash card offers two percent cash back.
The good news is that neither of these credit cards have an annual fee, so your profit margin is high if you’re paying off your balance in full each month and avoiding any interest. Using a cash back credit card for all your necessary purchases can mean getting a return on your investment that you might not have even expected. Not only that, some cash back credit cards have bonus categories where you get even more bang for your buck. For example, at certain times of the year, various purchases in a specific category will get you five percent cash back.
2. Affordable travel
Have you ever seen the headlines about people going abroad for next to nothing? You might think that travel hacking — the art of utilizing credit card miles and bonuses to get free or low-cost travel — is a scam, but I’m here to tell you, it’s not.
I’ve successfully used credit card rewards to go to Spain and Italy for less than $100. I signed up for a travel rewards credit card that offered a significant sign-on bonus and within three months of making purchases and paying off my credit card, I had enough miles to go to Europe.
If you’re looking to travel and want to save money in this category, a travel rewards credit card can help slash your expenses. By saving money on your flights, you can spend money where it really matters — on experiences and once-in-a-lifetime adventures.
Many travel rewards credit cards can come with an annual fee and a spending requirement, so make sure you can afford the annual fee and that the spending requirement fits with your budget. If you have those things checked off the list, a travel rewards credit card can maximize your savings on all things travel.
3. All about the perks
When it comes to credit cards, you might just think of rewards like cash back or travel miles and not much else. However, credit cards often provide an array of perks you might not be aware of. For example, credit cards can offer additional rental car insurance, free checked bags, travel insurance, access to exclusive events and more.
Taking advantage of the perks your credit card offers could help save you money in several different budget categories. The thing is many people don’t even know these perks exist. So if you have a credit card, read the fine print or talk to customer service about the various perks. If you’re opting for a new credit card, read about everything the card has to offer so you can maximize your savings strategy with your credit card.
4. Protecting your finances
It’s easy to associate credit cards with negative things like debt and financial ruin. But when used correctly, credit cards can actually protect your finances in a number of ways. First of all, many credit card issuers have stringent fraud protection programs that alert you any time there is suspicious activity.This can help you stay on top of any potential identity theft and handle situations quickly.
In the case of fraud, credit cards are actually a safer bet than debit cards. In many cases, you will not have to pay for any unauthorized charges on a credit card, whereas with a debit card, you could be on the hook for the charges. Ultimately, it depends on how quickly you report the charges.
Additionally, some credit card issuers offer free credit scores and credit monitoring as well, so you can stay on top of your financial health.
Having access to alerts, fraud protection and credit monitoring services can save you money in the long run and make sure your finances stay in good shape.
You might not think of credit cards as being a part of any savings strategy. However, as you can see, when done right, credit cards can make an impact on your financial life and result in some serious savings. You just have to dig a little deeper and utilize all the perks, rewards, and protections credit cards have to offer. If you’re a responsible credit card user and pay off your balances in full and on time, you’re all set. Let credit cards save you money, instead.