12 Ways Your Credit Card Can Save You Money

Your credit card can do more than just get you into debt.

Using a credit card entails careful spending and budgeting in order to minimize the dangers of accumulating debt or paying hundreds of dollars in interest and costs.

However, you may take full advantage of your credit cards and reap the benefits of rewards, points, and other perks if you shop intelligently and use your credit card strategically. You may do so without getting into debt as long as you follow two easy rules: only charge what you can afford, and pay your bill on time.

In fact, if you use it wisely, your credit card can save you a lot of money. Here are 12 ways your credit card can help you cut costs and save money:

#1: Reduce interest by moving debt balances.

If you have credit card debt, chances are you’re paying a lot of interest on that debt. You can move your balances to a credit card with a lower interest rate and save money on interest payments each month.

Here’s how a balance transfer works.

Many credit cards offer 0% APR for an introductory period of time on transferred balances. This means that you can pay off your debt without accruing any additional interest charges during the promotional period.

For example, transferring a $3,000 debt from a credit card with a 17 percent interest rate to one with a 0 percent interest period for 12 months saves you almost $400.

#2: How to Use Credit Cards with 0% APR

The longest promotional period allowed by the card is 12 months. 0% introductory periods are only available on credit cards with no annual fee and no fees for cash advances. On the other hand, some credit cards offer a 0% introductory APR on purchases as well. This means that any purchases you make during the promotion will be charged at 0%.

Using a 0% interest credit card to make several payments on a large-ticket item such as new furniture, medical care, or a holiday provides the opportunity to pay over time without accruing interest.

You can even get 0% APR with an Amazon credit card for 6, 12 or 18 month programs.

#3: Use a Cashback Credit Card to Pay for Your Purchase

You can get cashback credit cards. Cash back cards give you money back for every purchase you make with your card. If you can use your credit card to pay for the majority of your expenses rather than just the most profitable ones, you may earn more.

For example, you may make $360 per year on a card that gives out just 1% in rewards if you spend $3,000 each month on bills and other expenses.

The catch is that you must be able to pay off your credit card bill at the end of every month. Otherwise, interest charges will exceed any cash back payments rapidly.

Proper budgeting, monthly bill payments and monthly financial review habits that you put in place can stop you from missing payments and incurring unnecessary interest.

#4: Skip the Car Rental Insurance

If you have a credit card with rental car insurance, there’s no need to buy the additional insurance from the car rental company.

This is because most credit cards offer comprehensive coverage that includes collision damage waiver (CDW) and theft protection, which can save you up to $30 per day on your rental car costs.

Be sure to read the terms of service so you know what is covered before declining the rental car company’s insurance.

Some credit cards even extend CDW benefits to cover motorcycles, vans and campervans.

#5: Redeem Cashback for a Gift Card

Several credit cards collaborate with businesses to offer cashback bonuses on gift cards. You may get perks by using your cashback to acquire one of these gift cards.

For example, you may be able to get a $25 gift card for just $20 in cash back. You’ll earn $5 in discounts if you choose vendors that you already use.

#6: Use the Discount Mall

There are numerous credit card companies that have a “discount mall,” which is a group of national businesses with whom they collaborate to provide regular discounts to cardholders.

The credit card company’s discount mall can be a great resource for saving money on purchases you were already going to make.

For example, the American Express discount mall offers discounts of up to 50% off at select retailers.

You don’t even have to use your credit card to take advantage of these deals–many discounts are available to shoppers who sign in with their email address.

#7: Earn Free Travel or Hotel Stays

Some credit card companies offer travel rewards. These programs let you earn points for each dollar you spend on the credit card.

These points can be redeemed for free flights, hotel stays, and other types of travel.

Some credit cards even give out sign-up bonuses just for joining their program.

For example, the Chase Sapphire Preferred credit card offers 50,000 bonus points after spending $4000 in the first three months of having the card. That’s enough to redeem for a $625 flight or hotel stay.

The Capital One Venture Rewards Credit Card offers 40,000 miles (equal to $400) if you spend $3000 in the first three months of opening an account.

#8: Shop on Retail Cardholder Discount Days

Many credit card companies offer special discounts to their cardholders on specific days.

For example, the Chase Freedom credit card offers extra points for shopping at specified retailers on “Freedom Days.”

Similarly, the American Express Blue Cash Everyday credit card offers double rewards (cash back or statement credits) on purchases made at U.S. supermarkets from January through March each year.

Be sure to check your credit card company’s website regularly for information about upcoming discounts.

#9: Look for a Sign-Up Bonus

Credit card sign-up bonuses are one of the best ways to score free stuff.

Many credit cards offer bonus points, cash back, or airline miles for signing up and spending a certain amount of money in the first few months of having the card.

Depending on your credit card, you may earn $50 to $200 in bonuses. There are cashback programs, as well as free hotel stays and rewards points that can be used for airline flights. The spending target most often needs you to spend a specific amount on your credit card within the first few months of getting it. You can collect the incentive without having to spend any money at all.

For example, as mentioned before, the Chase Sapphire Preferred credit card offers 50,000 bonus points after spending $4000 in the first three months of having the card. That’s enough to redeem for a $625 flight or hotel stay.

#10: Extended Warranty Advantages

When you make a purchase with your credit card, the credit card company may offer additional warranty protection.

This is in addition to the manufacturer’s warranty.

Extended warranties on electronics might help you save money on expensive repairs or replacements. On the other hand, these insurance plans are frequently pricey.

For example, American Express offers a program called “Purchase Protection,” which covers most items you buy with your Amex for up to 90 days after the purchase date. If something breaks or is stolen, American Express will usually reimburse you for the cost of repairing or replacing the item.

Many credit cards also have a program that protects against accidental damage or theft for up to 30-90 days after the purchase date.

So if your new laptop gets waterlogged just a few weeks after buying it, you may be able to get it replaced without having to pay a cent.

Keep your warranty paperwork and Invoice with proof that you used your credit card to make the purchase on file, so you can quickly submit a claim if there is an issue with a device.

#11: Take Advantage of Price Adjustments

If you buy something and the price drops within a certain time frame after your purchase, most credit card companies will refund you the difference.

This is called a “price adjustment.”

To take advantage of this benefit, keep track of the prices of the items you’ve purchased with your credit card. If the price goes down within a week or two (depending on the credit card company’s policy), call customer service and ask for a credit for the difference.

For example, if you buy an iPhone for $600 on Monday but then see that it’s being offered for $550 on Tuesday, most credit cards would offer a credit for the $50 difference.

#12: Pay No Foreign Transaction Fees

When you use your credit card abroad, you’ll likely be charged a foreign transaction fee for each purchase.

This fee is usually around three percent of the total purchase price.

If you travel frequently, these fees may soon become out of hand.

However, there are a number of credit cards that don’t charge these fees. So if you’re traveling outside of the United States, it’s worth looking into a credit card that doesn’t have foreign transaction fees.

The most important rule: Don’t Carry a Balance

If you carry a balance and pay finance charges, none of the card’s advantages will outweigh the costs. Make a point of paying off your entire bill on time each month. Otherwise, any rewards or savings you might earn may be offset by interest and late fees later on.

Related: 5 Simple Steps to Pump up Your Finances

What’s your favorite credit cards for rewards, cash back and perks? Leave a comment below!