How You Can Save Money Using a Credit Card

I know; sounds like an oxymoron, right?  Really, though, times in the world of credit cards have changed.  Credit cards aren’t just for getting into debt anymore.  When used properly, they can reap major rewards and save you tons of money in the process. Here’s how: 

Earning Points

As we are on a journey to become debt free, credit card usage is minimal in our house.  But there’s one card we use on a regular basis.  It’s a Visa card that gives us 1 point for each purchase dollar, but it gives us double points for gas purchases.  Thus, whenever my husband or I fill up the gas tank, we use this card.  To date, including the account opening bonus we got, we’ve earned over 12,000 points, which can be used to purchase a variety of different things.

Getting Cash Back

Some cards will, instead of giving you points for purchases, simply give you cash back.  This option came in real handy for us in the beginning of our journey to debt free.  While looking to reduce our debt as quickly as possible, we found that our cash back card had nearly $400 sitting in its “earned” account, so we used that money immediately to boost our efforts in paying down our debt.  As long as you’re not paying interest on the account (i.e., paying the balance in full every month), using a card that will reward you by giving you cold, hard cash (either in the form of a payment to your account or by sending you a check), can give a good boost to your bank account.

Earning You Free Stuff

There are a variety of credit cards out there for every bonus-earning purchase under the sun, using a comparison site can help you find the best one for you. Some provide travel rewards, such as money towards airfare, hotel or car rental.  Others offer gift cards you can purchase with your earned points, gift cards from everywhere, for restaurants, hotels, online stores or even to your favorite big box store.  One of the first ways we used our points from the gas card was for a gift card to our local big box store.  By getting a free $50 gift card, we were able to reduce our grocery budget by $50 that month.   Another common way to get free stuff using credit card rewards is to save your points and use them to offset Christmas or holiday shopping costs.  What a great way to cut that Christmas gift budget!

Open and Use Credit Cards Wisely

One of the rules of the game when it comes to saving money while using credit cards is to do your due diligence.  Research the rules, terms and conditions of each card you’re considering before you apply for and use the card.  Things to look for?  Low interest rates, no-annual-fee cards (or cards in which the annual fee will be easily offset by the dollars/points you earn during the year), and no prepayment penalties.

The other main rule when using credit cards to save money is to be sure that you’re paying off in a timely manner, so that none of your earnings or savings are cancelled out by interest paid to the credit card company.  In other words, it’s important to pay the balance in full every month and avoid paying interest at all costs.

There are indeed a lot of ways to save money using credit cards if you’re willing to put in the research to find out which reward card option is best for your lifestyle.  Try it today and see!

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