Despite the media stereotype and hype surrounding credit card, cardholders can actually save money by using plastic. Contrary to what many Americans are led to believe, plastic can help save money instead of resulting to hefty balances and growing credit debts. Financial experts say that using credit cards wisely can lead to surprising perks and benefits that cash alone cannot equal.
Millions of Americans have multiple credit cards to their name. This means paying off monthly balances for several cards, all with different interest rates. Managing multiple credit cards with varying rates can mean shelling out hundreds of dollars each month just to meet the minimum amounts needed. By consolidating all existing balances in a single card, however, cardholders can better manage their debts at a lower interest rate. Some analysts say that instead of holding several cards at any given time, consumers can opt to transfer all their balances to a balance transfer card.
Of course, experts point out, cardholders need to find the best balance transfer card in order to actually save money. Consumers can start by figuring out the average interest rate for all their cards. Cardholders must then look for balance transfer cards with interest rates lower than the average rate of their cards. Consumers must also keep mind to choose credit cards with low or zero percent APR interest rates on balance transfers to save considerable amounts of money.
Analysts explain that in order for cardholders to actually make the most out of these money-saving tips, they have to pay their bills regularly and on time. They can also make use of their card companies' rewards program to pay bills and settle monthly minimum payments. Some credit cards have cash-back programs, which allow cardholders to actually get some of their money back if they are diligent enough to pay on time. By simply asking the card companies to make use of the cash-back amount to pay off their monthly bills, cardholders can actually get a portion of their payment back. Consumers can then take the money they were supposed to use to pay off their balances and place it in a high-yield account.
Another suggestion offered by credit experts would be for cardholders to sign up for auto-pay programs. By allowing card issuers to get a certain portion of their clients' money to pay off bills, cardholders no longer have to worry about missing payments. This can save consumers hundreds of dollars in hefty penalties and fines.