How to Use a Credit Card to Save Money

Credit card companies want your business, so they're offering rewards such as frequent flier airline miles, discounts on purchases, free travel insurance and other perks. It's actually becoming possible to save money with a credit card.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Internet Access
• Credit Cards
• Computers

1. Get on the Internet and check out credit card Web sites such as CardWeb.com or Bankrate.com, where you'll find information about credit cards and rates.

2. Evaluate each card that offers an interest rate you can accept, as well as perks you want.

3. Know that the deals may change weekly or even daily. If you see a deal you can't pass up, apply immediately.

4. Hunt for a card that offers travel benefits such as frequent flier miles or discounts on travel services.

5. Check out cards that offer free insurance benefits. Some provide $1,000 or more of accidental death and dismemberment insurance. Others offer coverage of rental car accidents and lost luggage.

6. Evaluate cards offered by Internet service providers. Some will pay your monthly ISP subscription charges if you make big purchases on the card.

7. Look for cards that offer bonus points. The points can be exchanged for discounts or freebies at restaurants, department stores and bookstores.

Tips & Warnings

• When comparing cards, remember to inquire about annual fees as well as interest rates.
• Avoid applying for a large number of credit cards. The more cards you have, the more likely it is that one will wind up in the wrong hands.
• Pay off the card balance as soon as possible, or you might wind up paying interest charges that far exceed the value of the perks.

Who Can Help Sponsored

• How strong is your score?  Did you know checking your own credit won’t affect your score? Click here to see yours in two easy steps from Experian.

[ronron]

on 8/23/2008 good idea ...

on 11/22/2005 Some credit cards offer a low percentage APR for balance transfers. You can transfer this money to a checking account and then to some savings account with a APY better than the APR. This way, you will make money.
But be sure to find all the terms of the credit card. Some might not allow you to transfer money to bank accounts, some might charge a balance transfer fee, some might have a APR which will be low for a while and then jack it up after a promotional period. All those might end up to incur losses on your part.

on 11/22/2005 A teacher of mine told me this, but I have never actually tried it myself. Find a credit card with no annual fee. I don't know how rare it is, but find a credit card that does not charge you interest if you pay your bill in full. Whenever you get a paycheck, stick that money into a savings account, or something that earns interest (but where there is no risk of losing money). Know EXACTLY how much money you have, then buy everything with your credit card. NEVER spend more money than is in your bank account. When the bill rolls around, pay it in full and you'll have no interest charges. Now you made all your normal purchases and the money to pay it off earned some interest for you! It may not be a lot of money but eventually it may turn out to be a good bit of money. And, it also helps your credit :)