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How to Save on Credit Cards: A Cost-Effective Way to Save More When Times Are Tough
Statistical reports prove that Americans love plastics. Consumers are more familiar with it as a credit card. In fact, nearly 81% of American households own at least one credit card. They consider this plastic to be the most convenient tool for shopping and paying utility bills.
Credit cards make payments and expenses so easy that the average American credit card balance amounts to $ 8,000. It is indeed a very large debt.
So, if you want to avoid debt and save more on your credit card bill, try to reduce your expenses and follow the rules on how to save on credit cards.
Here's how:
1. Choose the best credit card
Not all credit cards are created equal. There are certain credit cards to suit your needs. Getting this type of card will give you rewards, services, and interest rates that suit your needs.
For example, if you want to shop comfortably but can't afford to go the extra mile in shopping expenses, it is best to get a credit card that can offer you a reasonable credit limit. This way, you won't be tempted to get the most out of your cards and accumulate debt that you can't afford to pay.
2. Select the lowest interest rate
If you feel like you can't pay your credit card bill on time but are willing to pay your balance at another period, it is best to get a credit card with a lower interest rate.
Consumers may not be aware of this, but one reason why debt is getting higher is because of interest rates. The actual balance is made worse through the cost of interest rates.
3. Choose a reward credit card that suits your lifestyle
Don't get a credit card just because it can earn you a few prizes. Not all rewards are worth your time and money.
For example, a frequent flyer reward credit card may not work if you don't travel often. But if it is, getting a flyer gift credit card can earn you discounts as well as points that can be turned into tickets. This will be a savings considering the current airfare price.
4. Record all your expenses
With a credit card, convenience is the ultimate goal. However, that doesn't mean that you ignore your responsibilities. One way is to record all your expenses.
This way, you will be able to identify which purchases are not necessary at all. So next time, you'll know what to avoid.
5. Don't keep your balance
Don't let your balance stay on your credit card statement for long. This means that if you have a balance accrued for the month, try to pay it off immediately.
Paying your minimum balance alone won't do you any good. In fact, this can lead to further debt. In addition, the interest rate only applies if you have a balance. And the interest rate is an additional fee for you. If you pay your balance every month, you won't be charged the interest rate, so you get more savings.
6. Be careful with cash withdrawals
If it's not an emergency, never take cash on your credit card. Financial experts say that cash withdrawals reap a higher interest rate than what you have on your credit card purchases, which in turn also spikes.
The combination of the two will definitely lead you to debt problems. In addition, cash withdrawals do not take place within a certain period, so fees will be charged immediately. It will be very difficult if you are not ready to pay off your balance right away.
7. Ask for a lower rate
If you've become a compliant customer and pay your bills on time, there's nothing wrong with contacting your bank or credit card issuer and asking for a lower rate.
The survey shows that nearly 55% of those who participated in the survey reported having lowered their interest rates simply by asking their bank or credit card company to act accordingly.
With lower interest rates, you can definitely save more, especially if you are the type of credit card holder who cannot pay your balance on time.
All these things are provided to help you reduce expenses and save more on your credit card. These things proved effective. Now it is up to you whether you will heed this advice or not.
Just remember, your actions will always tell you the kind of life you want to live, so it's better to make good choices and start saving now.
