Being surrounded by different things which are draining our monthly budget, we are on a constant lookout for ways to save money. The standard suggestions are that we should keep track of our spending and decrease utility bills, grocery bills, etc. These suggestions are just fine, and we should consider them, but we should also try and save money on some other items. One such item is the credit card. Namely, do you know that you can save money on your credit cards as well? Maybe you are neglecting this possibility, but you should definitely get familiar with a couple of ways to save money on your credit cards. Why spend money when a bit of knowledge could save you money?
- Use balance transfer to consolidate credit card debt
A balance transfer can offer an opportunity to save money on your credit card debt. But the saving opportunity should be carefully evaluated. When considering a balance transfer, make sure that you take into account the balance transfer fee. The saving made on your debt during the introductory period with a low or 0% APR should be taken into consideration along with the cost of the balance transfer fee. Keep in mind that in order for the saving to be made, you should be able to repay the debt before the end of the introductory period. Otherwise, your credit card debt may end up costing you more than the cost of your debt on your old credit cards.
- Rewards cards can save you money, but they could also cost you money.
There are credit cards offering different types of perks and rewards. If you are using an adequate type of credit card in accordance with your spending habits and lifestyle, you could benefit from numerous rewards. But the trick is that banks are giving rewards on your credit card at some cost. Namely, banks are charging higher interest rates on these types of credit cards. So, in order for saving to be made through rewards, you should be able to pay your outstanding balance in full each billing cycle. In case your lifestyle or your budget is limiting you from paying the full balance, then maybe you should be considered other ways to save money on your credit cards.
- Don’t go with the minimum payment on your credit card
You are making the minimum payment on your credit card each month, and that’s just fine. But is it really ok to pay the minimum? Do you know how much time it will take to repay in full the outstanding balance by paying the minimum? It can take a couple of month’s even years if you have maxed out your credit cards. During this time, you are paying an interest rate. Remember, the longer the repayment period, the higher the accumulated interest costs. Thus, in order to make a saving on your credit cards, try to pay more than the minimum each month. This way, you will decrease your outstanding balance faster and save on your interest cost. In addition, you will be debt free in a shorter period, at least credit card debt free.
- Select the best credit card for you
Before you make the decision to apply for a credit card, go through the different types of credit cards. Consider the reasons why you need a credit card. You should also consider your lifestyle and spending habits. This way, you can ensure that you are applying for the right type of credit card.
- Negotiate a lower interest rate on your credit card
For one reason or another, when you first applied for your credit card, you got a certain interest rate. But do you know that you can contact your issuer about the possibility of lowering the interest rate on your credit card? If you have an improved credit score or if you have good payment history, you may be entitled to a lower interest rate. Trying to negotiate a lower interest rate could lead to savings on your credit card costs. As a starting point, you may go through the offers of other issuers and see the terms you would get if you apply today.
Regardless of their practicality and need, credit cards are rather costly. If you don’t manage your credit cards wisely, you could end up with a high-cost financial product that is draining your monthly budget. For this reason, make sure that you are acquainted with tricks to save money on your credit cards. There are a couple of them listed here, but there are other ways as well. Dedicate a portion of your time to getting familiar with the possibilities to save money. Who knows, maybe these smaller savings will add up and be enough for a mini vacation.