Monday, February 23, 2009

Ways On How To Save Money On Credit Cards

How To Save Money On Credit Cards: The Most Effective Ways To Save Money During Tough Times.

Many people nowadays are looking for different ways on how to save money. Americans have proven through statistics that they are in love with plastic. Of course we're talking about the kind you don't recycle, credit cards. It's estimated that around 81% of American households have at a minimum one credit card. It's not a surprise as credit cards are one of the most convenient ways to pay for bills and shopping. Being so convenient, it makes it harder and harder to save money. So how do you save money on credit cards? Read on so you can learn some proven ways on how to save money.

Being that making purchases and payments with credit cards is so easy and convenient when managing expenses, it results in the average credit card balance that Americans have being around $8,000. So how can you save money with such a large amount of debt? Who doesn't want to save money?

That's where this article comes in. For people who are looking for ways on how to save money on credit cards, you should take the following tips to heart. If you're trying to avoid debt and save on your credit card bills, you will have to cut back on your expenses while following these rules on how to save on credit cards.

Here’s how to save money on credit cards:

1. You always want to choose the best credit card.

Why do you want to choose the best credit card? All credit cards are not created equally and need to be tailored to your needs. That's right, there is a specific credit card that is suited for your needs. When looking for a credit card, choose one that will provide you with rewards, low interest rates that will tailor to your needs and services that will benefit you in order to help you save money. 

An example, if you are looking for convenient shopping but you can't afford to push the limits of your shopping expenses then it is in your best interest to get a credit card that is able to offer you some reasonable credit limits. By doing this, you won't be tempted to max out your credit card so therefore you won't accumulate debts that you can't pay down the road. This in the long run can save you money. 

 2. You want to shop for the lowest interest rate.

Now if you are thinking that you won't be able to pay off your credit card bills on time but in turn you want to pay your balances in another period then it is in your best interest to get a credit card that provides a low interest rate. A low interest rate is one of the better ways on how to save money on credit cards as we'll explain further.

When it comes to ways on how to save money and stay out of debt, you may want to know that one of the biggest reasons why American's credit card debt is always climbing is because of the credit card's interest rate. The higher the interest rate, the worse of you will be in the long run. That's because the balances of the credit card are directly tied to and are made worse by the interest rate charges. 

 3. You want to grab the credit card that provides rewards that suit your lifestyle. 

Basically, you don't want to get a credit card that provides an abundance of rewards that you will never use. It's a waste of time. Remember that when it comes to ways on how to save money, that all rewards are not always worth your money and time.

Let's take frequent flyer rewards as an example. Does it make sense to get a credit card that provides frequent flyer rewards if you are not a frequent traveler? Or what if you travel a lot, but only by car, bus or train? Flyer miles won't help you out. Although, if you are a flyer, getting a credit card with frequent flyer rewards can give you the discounts you need as well as turning the points you earn into much needed tickets. This can be a great savings as tickets today are quite expensive. 

 4. Make sure to keep a record of all your expenses.

This is a very important tip for ways on how to save money. If you're looking for ways on how to save money on credit cards, then tracking your expenses is a must. As said before, convenience is the name of the game with credit cards. But don't let convenience derail you into neglecting your responsibilities. One of these responsibilities is to keep an accurate record of all your expenses and finding different ways on how to save money on credit cards through your financial purchases. 

By doing this, you can easily track and identify the purchases that weren't necessary and you can target the times where impulse buying wasn't needed. That way, you can avoid making some of these mistakes the next time around in turn saving you money down the road.

5. You don't want to keep balances.

You don't want you credit card balances to stay on your billing statements for too long. What this means is that if you buy something, you want to be able to pay it off as soon as possible. A lot of people use the rule that if you can't pay it off in cash, then don't buy it. A lot of people just use the credit card to buy the purchase in order to keep their credit flowing. Then they pay off the purchase in full. Good for your credit and great for a way on how you can save money. 

Remember when it comes to how to save money, paying your minimum balance will not do you any good as you are accruing interest. This bad habit of paying the minimum balance on your credit card may further your debt. Also, it's important to know that interest rates apply whenever you have a balance and the credit card interest rates are just additional charges that you don't want. One of the best ways on how to save money on credit cards is to just pay off your balances monthly and you won't accumulate interest rates and that's an important way on how to save money on credit cards.

6. Be cautious of cash advances.

The rule of thumb is if it's not an emergency, a real emergency, then don't even bother with cash advances on your credit card. Take it from financial experts who say that cash advances will cause higher interest rates as compared to the interest rates on your normal credit card purchases. By applying some proper techniques to cut back on your expenses and saving on credit cards, your emergency fund should technically be in the money you saved.

Also, the combination of credit card cash advances and credit card purchase balances will bring you nothing but debt problems and deter your goal of finding ways on how to save money on credit cards. An important thing to know is that cash advances don't take on certain periods and that will mean that the charges will take place immediately. If you aren't ready to pay off the balance asap then it could be very hard on you when you're trying to find ways on how to save money. 

7. Don't be afraid to ask for a lower rate.

When it comes to saving money on credit cards, why not try to save more money? If you have been paying your bills on time and have been a good customer to the credit card company then it won't hurt for you to give them a call in order to ask for a lower rate which will save you money.

In the past, surveys have shown that almost 55% of the people who participated in the survey to find out the ways on how they save money on credit cards were able to cut down their interest rates by simply calling their bank or credit card issuer and requesting for a lower interest rate or even an upgrade to a better credit card. 

Lower interest rates on your credit card means that you will save more money on your credit cards and save you money. 

All of these ways on how to save money on credit cards are provided to help you cut back on your expenses in order to save money. There are many ways on how to save money and following the previous tips is your first step to saving money. These tips have been proven effective when trying to save money on credit cards.

Remember, your actions will tell you the kind of life you want to live, so it's better to make the right choices and utilize these proven ways on how to save money on credit cards.

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