10 Tips To Help Save You Money On Your Credit Card
Here’s a rundown of the ten best ways to help you save money when using your credit card.
1. Make The Most Of 0% Credit Cards
Interest free credit cards are a great way to make big purchases on your credit cards – provided you can settle the balance in full. 0% credit cards allow you to spread the cost of your purchases without the nagging worry that your debt will grow each month.
2. Don’t Miss A Payment
As simple as it sounds one of the best ways to avoid unnecessary credit card charges is to just pay your bill on time. Most credit card companies are quick to add additional charges onto your account should you fail to pay your bill on time. These charges can also apply if you go over your agreed credit limit, or if your direct debit or cheque payment is returned.
3. Avoid Withdrawing Cash From Your Credit Card
Try to avoid withdrawing any cash on your credit card and instead only use the card for actual purchases. Interest rates on cash withdrawals are considerably higher and you can also be charged a cash withdrawal fee that can range anyway between 1.5% and 3%.
4. Credit Card Purchases Abroad
It is important to be careful when using your credit card abroad. It is possible that your credit card provider will add a foreign usage charge onto your account. These charges can be as high as 3%. This also applies to cash withdrawals that you make overseas as well as actual purchases.
5. Payment Protection Insurance (PPI) Is Not Compulsory
Payment Protection Insurance or PPI is an insurance policy that credit card companies offer. The policy will pay a percentage of your monthly credit card bill should you become unable to keep up to the payments through illness or redundancy.
It is worth noting however that PPI can be costly and is a decision you should think carefully about. Make sure that you calculate how much the PPI policy will cost you, and that it suits your circumstances.
The policy is not compulsory and should you change your mind it is possible to take out Payment Protection Insurance at a later date.
6. Earn Interest With Your Credit Card
A popular method of making your credit card work for you is to make the most of 0% purchase credit cards. If you’re planning on making a large purchase of several thousand pounds or more, why not make the purchase using a 0% credit card and move the cash you were planning on using into a high interest savings account.
This will earn you interest on your money for the 12 month period until your 0% rate expires. But of course don’t forget to pay the credit card off before the 0% interest free period ends!
Some of the most popular credit cards offer up to 12 months of interest free borrowing.
7. Try To Opt For A Lifetime Balance Transfer Deal
If you’re unable to pay back your credit card balance in full once your 0% balance transfer deal runs out, it may be worth opting for a lifetime balance transfer deal.
It may be that you will not be able to transfer out your debt to another 0% balance transfer deal when the time arises and this could see you hit with a hefty interest rate increase as high as 13.9%.
8. Avoid Using 0% Balance Transfer Credit Card For Regular Purchases.
It is important to note that most 0% balance transfer credit cards structure their repayments and will always pay off your most expensive transaction last.
This can lead to large charges, so it’s definitely worth avoiding making regular purchases on a 0% balance transfer credit card.
9. Make More Than Just The Minimum Repayment
It can be tempting to only pay the minimum repayment each month, but it can leave you in debt for years and years. Couple that with any interest on top and you can feel as if you’re treading water with your credit card debt. It is important to pay more than the minimum required each month to help you shed your credit card debt as soon as possible.
10. Benefit From Cashback Credit Cards
Cashback credit cards can be a great way to save money provided you use your credit card regularly and settle the balance in full each month.
Cash back credit cards work by giving you back a cash reward calculated as a percentage of your usual spend. The rewards can also take the form of points that can be redeemed for high street or restaurant vouchers.
Depending on the reward credit card type other benefits can include free travel insurance, holiday discounts and event free air travel.
