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How to Save on Credit Cards: The Cost-Effective Ways to Bigger Savings When Times are Tight
Statistical reports prove that Americans are in love with plastic. Consumers know it more as credit cards. In fact, nearly 81% of American households have at least one credit card. They find these plastic as the most convenient tool for shopping and paying utility bills.
The credit cards make payments and expenses so convenient that the average credit card balance Americans have amounts to $8,000. That is, indeed, a great amount of debt.
So if you want to avoid debts and save more on your credit card bills, try to cut back on your expenses and follow the rules on how to save on credit cards.
1. Choose the best credit card
Not all credit cards are created equal. There is a particular credit card that will suit your needs. Getting this type of card will provide you the rewards, services, and interest rates that will suit your needs.
For instance, if you want convenient shopping but can't afford to go the extra mile in shopping expenses, it is best to get a credit card that can offer you with reasonable credit limits. In this way, you will not be tempted to max out your card and accumulate debts you simply can't afford to pay.
2. Go for the lowest interest rate
If you think you can't pay your credit card bills on time but are willing to pay your balances in another period, it is best to get a credit card with lower interest rates.
Consumers may not be aware of this, but one of the reasonswhy debts are getting higher is based on the interest rates. The actualbalances are made worse through interest rate charges.
3. Choose the reward credit cards that suits your lifestyle
Don't get a credit card just because it can provide you with several rewards. Not all rewards are worth your time and money.
For instance, a frequent flyer’s rewards credit card may not be functional if you aren't a frequent traveler. But if you are, getting a flyer’s reward credit card can give you discounts as well as points that can be converted into tickets. This will be savings considering the prices of airline tickets nowadays.
4. Keep a record of all your expenses
With credit cards, convenience is the name of the game. However, it doesn't necessarily mean that you neglect your responsibilities. One of which is to keep a record of all your expenses.
In this way, you will be able to identify which purchases weren't necessary at all. So the next time around, you will know what to avoid.
5. Do not keep balances
Never let your balances stay on your credit card bill statements for long. This means that if you have accrued balances for the month, try to pay them immediately.
Paying your minimum balance only won't do you any good. In fact, this might trigger further debts. Besides, interest rates only apply whenever you have balances. And interest rates are additional expenses for you. If you pay your balances monthly, you won't be charged with interest rates, so you get more savings.
6. Be wary of cash advances
If it isn't an emergency, never take cash advances on your credit card. Financial experts say that cash advances reap higher interest rates compared to the ones that you have on your credit card purchases, which are, by nature, soaring as well.
Combination of these two will definitely bring you to debt problems. Besides, cash advances don't take on certain periods, so that means the charges will take place instantly. That would be very hard if you aren't prepared to pay off your balance immediately.
7. Ask for a lower rate
If you have been an obedient customer and pay your bill ontime, it wouldn't hurt you to call your bank or your credit card issuerand ask for a lower rate.
Surveys show that nearly 55% of those who participated in thesurvey were reported to have trimmed down their interest rates simplyby requesting their bank or their credit card companies to actaccordingly.
With lower interest rates, you can definitely save more especiallyif you are the type of credit card holder who doesn't get to pay thebalances on time.
All of these things are catered to help you cut back yourexpenses and save more on your credit cards. These things have beenproven effective. It is now up to you if you will heed this advice or not. Just remember, your actions will always tell you the kind of lifeyou want to live, so better make good choices and start saving now.
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