If you are a conscious and energetic saver, then you have most probably been told that credit cards are bad and evil things that you need to stay well away from! However, used the right way, a credit card can be a great way to save money! So, how can you save money by using a credit card?
Let the interest work for you
As we all know, credit card companies make a profit by charging their users interest. But, the interest that credit card companies charge is only charged if the credit card holder – you - doesn't pay their credit card bill in full each time; deciding, instead, to pay in installments. Nonetheless, pay your credit card bill in full each time and not only are you not charged interest for using the credit card, but you can also get up to 2 months credit free interest.
This happens because the credit card company is normally required to give you 28 days after your statement date in order to pay your credit card bill. However, if you buy your product shortly after a credit card statement date, you can get nearly another month's interest free credit while you are waiting for the credit card statement to arrive.
As a result, if you are a good and conscious saver, what you can do is open a savings account and every time you make a payment on your credit card, you transfer the money you would have spent on the purchase to the savings account. Then, on the credit card statement due date, you transfer the money from the savings account to pay the credit card bill. In the meantime, the interest that has accrued on that money while you were waiting for the credit card bill is all yours!
Using the loyalty bonus scheme
Aside from making sure you pay off your credit card bill in full each month, another way you can use a credit card to save you money is to apply for a credit card that has a loyalty bonus award scheme. Then, after you have reached the required number of loyalty bonus scheme points, you can use those points to purchase something you would otherwise have had to pay good money for.
So, now that you don't have to pay good money for the product you just got from the loyalty bonus points, you can transfer the purchase price of the product to your savings account – and you've just saved yourself some more money!
Keep in mind, however, that to maximize your credit card savings potential, you really need to apply for a credit card that doesn't charge you any annual membership fee or have any other additional hidden fees. Provided you have this in place, a credit card can be a really great way for you to save money
Joseph Kenny writes for the
Loans Store and offer more information on
personal loans and other loan topics available on site.
Visit today:
http://www.ukpersonalloanstore.co.uk/
