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Research: Some money saving ways of using credit cards - Credit-Land.com

Credit cards can lead some people to spending beyond their means. Plastic money has been used by a lot of brands to increase their sales through tie-ups, offers, promotions etc. which lead credit card holders to spend even when they are aware that their outstanding balances would be hard to repay. However, on the positive side of the story, there are many people who follow some strict rules of using the credit cards which help them save a lot of money and even get rewards and benefit from discounts.

Bill Payment and Grace period

If you pay back your outstanding bills within the bill payment cycle, you almost always tend to benefit. This is because of a simple calculation. When you purchase using a credit card anywhere during the month, you don't need to pay cash up front. You will get the bill a few days later and then there is some more time or grace period to pay the bill. If it is a major expense you can effectively save the interest on the money you spent, because you have to pay the cash sometimes almost a month later, which will be a very good saving for bigger expenditures. Therefore it is not a bad idea to make big credit card purchases just after the bill payment and use the money as part of a money saving scheme. Over a period that interest will accumulate to a substantial amount.

Cash back offers and Discounts

If you have a good credit rating you get cash back credit cards which you can use for your benefit. You would basically end up saving anywhere between 1-5% which is like an effective discount at groceries, malls or gas stations. If you save 5% on 1000 dollars, you are still saving 50 dollars every month which is quite substantial over a period of time.

Credit history

If you have a good credit history and you develop it by using the credit card for all your expenditures and then paying back the bill before due dates, you get a good credit history which helps you indirectly save money. This is because the interest rates on loans you get, house mortgages, car loans or future credit cards would all be less for those who have a very good credit history. In short you will indirectly save money for the future by just paying your bills on time.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.