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5 Ways Credit Cards Can Help You Win the Game of Savings

Team Jar
October 27, 2022
5 Ways Credit Cards Can Help You Win the Game of Savings

Your credit card can save you money more than you think! To know more, checkout this article.

Credit cards always have so much more to offer than just providing you with easy access to credit. Some additional advantages of credit cards include airport lounge facility, balance transfers, insurance covers, etc.- these are known to almost every credit card owner. 

Your credit card can offer you other crazy deals and discounts too, and on top of that, it raises your credit score- given that you use it smartly. The only thing you have to take care of is the payment of your debts before the due date and relax!

Even after the emergence of several monetary alternatives like online payment apps, credit cards are still relevant and constitute millions of users worldwide. 

Especially when you require to raise a short term debt- without harming your current budget or financial status- credit cards are the best way to carry out transactions. This is one of the many advantages of credit cards. 

The offers and discount promises that it makes are always authentic, unlike the dud deals and discounts of many online transaction apps and tools. 

If you take a closer look at the impact of credit cards, one of the most important things is the reduced demand for currency. Since every credit card comes with a set amount of interest-free credit, those who buy a credit card prefer to carry less cash with them. 

What drives this habit is also the fact that you can literally use credit cards almost anywhere. Not just domestically but in a foreign country too- it accounts for another advantage of credit cards. 

It is true that when it comes to cash withdrawal, credit cards aren’t the best option. This facility is accounted for as an additional feature offered by banks and is liable to certain charges. 

You can instead make use of your credit limit and make sure that your spending doesn’t overshoot beyond your monthly income. 

When it comes to making investments using credit cards, there is a major risk involved. You may end up borrowing money that you can’t even repay! 

It is generally advised NOT to use your credit card to buy stocks. However, the government has opened doors for credit card users here too! Now you can invest in NPS through your credit cards and earn a good scale of profit. 

In addition to making investments, you can use your credit card to make money too. A simple way to do this is to opt for a cash back credit card. This type of credit card lets you accumulate cash rewards on your credit card and pay you based on your monthly spending's. 

But can you imagine that something that you use in order to spend money can also be a way to save money. That something here is your credit card, and yes, your credit card can save you money. 

Many of us would still undermine this fact. The prominent reason behind this denial is the heavy interest rates that are charged by the credit card issuer companies. But remember, that happens only when you default on payments. 

If you make your payments on time, things will be heavenly for you.

Let’s take a look at 5 most efficient and effective ways to save money with credit cards:  

1. E-commerce websites - best way to get big discounts

This is perhaps the most basic thing that comes to your mind when you plan to save money with credit cards. If you are the owner of several credit cards, you can easily make use of them to earn the best discount deals. 

In most cases, the e-commerce companies will definitely tie up with one or the other credit card companies. If you are holding this specific company’s credit card, you are most likely to get your hands on a special pricing offer or amazing discount facilities. 

The benefits may even include interest-free EMI options- a very simple way to save money with credit cards, isn't it?  

So, the next time you are all set to shop through an e-commerce website, first check if your credit card offers you these deals!

2. Reward points- more important than you think

Every time you spend using your credit cards, the credit card company gives you certain reward benefits as per their reward programme. 

A reward point usually ranges between 0.2 and 0.75. Either your company will let you use these reward points while repaying the credit card bills by turning them into cash awards, or simply offer you certain gifts, or more likely, some gift coupons. 

You are lucky if your company offers you the choice between getting cash or gift coupons- which is almost unlikely to happen. But if it does, you must carefully study the rationale behind reward points and convert them into cash likewise- get cash in your hand and save money with credit card! 

However, if you are compelled to receive only gift coupons, you must pick the one that suits your current needs the best. 

You must keep in mind that reward points generally have an expiry date, so you have to use them before that. Instead, you can opt for special gift coupons and use it to get things that you want, like groceries through superstore coupons! 

Read more: 9 ways to use Credit Card Rewards points effectively

3. Co-branded credit cards- one of the best ways to save money with credit cards

If you want to take one step ahead of reward points, you must check out the co-branded credit cards.

These cards come in handy if you are a frequent user of credit cards for air travel and supermarkets. You will be earning certain points, or more specifically, some air-miles, that you can use to settle bills at a co-branding partner- saving you enough money.

Plus, these cards will obviously come along with additional benefits like airport lounges, discounts, and insurance facilities. They are super easy to use and let you save money with credit cards while also enjoying a basic minimum set of benefits.

However, one drawback of this type of credit card is that they don’t offer any other major benefits other than transaction facilities at co-branding partners. Therefore, be careful about what you choose. In the end, it's you who pays the bill. 

4. Cash backs- a simple way to save money with credit cards

As you may know, this option is usually kept as an alternative by the card issuers to the reward point driven credit cards. This facility is not very famous but is worth giving a try, especially if you have access to limited funds for spending. 

Generally, there are two options available: one with cashback on utility bills and the other one with cashback with enlisted partners- fine-dine, e-retailers and super-stores- helping you to save money with credit cards

Note: In order to win here, you must carefully read the terms and conditions attached to this facility. Some companies prefer to limit the number of transactions eligible for cashbacks. 

Others restrict the limit of monthly cashbacks and others may even require you to spend a basic amount daily (say Rs. 750) in order to be eligible for cashbacks. So, be careful when you decide to pick a card with this accessibility. 

5. Pay no foreign transaction fee- amazing way to save money with credit cards

Another advantage of credit cards that helps you to save money is the access to no foreign transaction fee. Most of the credit cards will charge you around 3% of the total transaction carried out by you in foreign currency. These fees are pretty hefty enough to bear a hole in your pocket, so they are best to be avoided. 

There are several varieties of credit cards available on the market. If you are someone who flies frequently to other countries, you must consider choosing a credit card that doesn’t charge you this fee. This helps you save some money on your travels. 

Note: Every time you go to a foreign country with your credit card, inform your credit card company. This is important because your card may get blocked by being declared as a fraud protection

Your credit card can help you save money if you use it strategically. How you use your credit card not just depends on the things that you wish to buy but also on your financial goals. You must opt for the card that suits your goals perfectly. 

Be it a 0% APR facility card that lets you carry out transactions with no interest rate charges or be it some sign-up bonuses on new credit cards- if your goal is to save money with credit cards, you must first explore all sides of this sleek card. 

Also read: 7 Steps Young Adults Should Take to Build A Great Credit

Download the Jar app to learn more about savings and investment plans as a beginner. You can invest in gold beginning with just Rs.10. So, let your saving and investment game begin with Jar!