There are many blogs out there that will tell you about the dangers, risk and the penalties for paying thousands of dollars for debts.
Given that there may be some truth, the honest truth is that how much debt you incur will depend on how you use your credit card.
The bad news is that there is high probability that you could incur a lot of debt, which will ultimately ruin your credit.
The good news though is that you can learn and follow the rules, build your credit score and generate more money.
And the truth is that you can do that without incurring any debt. Just make sure you follow all the rules, which include charging only what you can pay and making your payments in time every month.
Below are the five ways you can save money by paying with your credit card:
Apply for a Credit Card With a Sign-Up Bonus
There are tons of credit cards that offer sign-up bonuses out there if you do a thorough research.
There are a number of bonuses that you can get. From cash back to accommodation in a hotel for free.
For you to get your bonus, you don’t need thousands of dollars on your credit card. Instead, you just need to spend a certain amount on your credit card and you qualify for the bonus. Here is more info about credit card rewards.
Redeem Your Cash for a Gift Card
Maybe you don’t feel like you need cash for a reward. That’s not the end of the road. You still have an option to choose from. Yes, you can opt to redeem your cash for a gift card. It’s your prerequisite. For instance, you can choose to redeem your $20 for a gift card.
Skip the Car Rental Insurance
By using your car rental agency’s rental cover, you will be increasing your rental with more than $20 every day.
That’s $140 if you do that for a whole week. But here is the good news; Most of the credit card companies will provide you with car rental insurance, but that’s only if you decline your car rental company cover.
Pay for Everything With a Cash Back Credit Card
The advantage of cash back credit cards is that you can save all your cash rewards on your credit card.
The trick is that if you intend to purchase anything, it’s better to use your credit card. But that doesn’t mean you should only pay for items that you are sure will give you the most rewards.
For instance, if you happen to have spent $5000 every month on purchases, payment of bills etc, you can generate up to $600 every year on your credit card if it pays one percent.
Shop on Retail Cardholder Discount Days
While you could be hearing people saying that retail credit cards aren’t the best to have, those are talks with no justification. The truth is that retail credit cards could offer you reward programs giving you special discounts, which is a rare opportunity.
What you need to do is to carefully go through the rewards program. In case you don’t understand anything, call your card company to explain more.
Sinha concludes that, “Prudent use of credit card is an enabler for most us. It helps you transact and live a better lifestyle. But misuse of the same can land you in a debt trap.”