Your credit card isn't just a tool for making purchases, it can also help you save money. Don't laugh, we're not kidding. It's no secret that credit cards have a bad reputation for putting people into debt. But when you take another look at how you use your card, you might find that there are actually some great ways that it can boost your savings.
The best way to start saving money is to just look at things from a different point of view. A line of credit is a huge privilege. It means that you're trusted with access to a lot of money. Instead of using your credit card as a means to spend, why not put it to work to help you save? Here are six ways to look at your card from a savings perspective.
Build Credit History
A credit card is a great way to start building credit. When you manage your available credit responsibly, your credit score can go up. And a better score means that you have a greater chance of being approved for future loans at a lower rate. Over time, a lower rate can help you save hundreds, or even thousands, of dollars.
A tip for boosting your score with a credit card: Don't spend more than thirty percent of your credit limit and pay off your card each month.
Take control of your interest. If you have a credit card with a high-interest rate that you're struggling to pay off, it's time to look for something better. Doing a balance transfer to a card with a lower rate can help you shave off a large chunk of your monthly bill. When you kick that high interest to the curb, you can tackle your debt faster.
Some cards reward you for purchases with savings that you can use later. Our Platinum Elite Rewards Visa® gives you one point for each dollar you spend on your card. Then you can cash in those points for cash back, gift cards, discounts on gas, charitable donations, travel, experiences, and so much more.
In addition to rewards, many credit cards come with benefits through the card issuer. These benefits can range from roadside assistance to reimbursement for lost luggage. Check out the benefits of Lake Trust Visa Credit Cards to explore more.
Most credit cards come with travel and accident insurance. Because many of us don't know this, we often opt for additional insurance when we're traveling. A quick look at your credit card policy could save you from paying for something that your card already covers.
Avoid Deposit Fees
When you book a hotel room or rent a car, you're usually asked for a credit card to make the purchase. The money stays on hold until you check out of your room or return your car, just in case there are additional fees that need to be added to the total bill (damage to the vehicle, for example). If you don't use a credit card, sometimes you'll get hit with extra fees to cover these incidental costs upfront.
When an unexpected disaster strikes, it can have a major impact on your savings. Think of your credit card as a backup savings account. If you don't have enough to cover the emergency, your credit card can give you easy access to funding to pay for the expense. It's comforting to know that if something bad happens, you don't have to scramble to find cash fast.
As a side note, figure out your definition of an emergency before it happens. Getting the latest piece of technology because you don't have the most recent version probably isn't an emergency.
The road to saving money is all about finding new paths and changing the way you look at your life. Your credit card can either help you get ahead or serve as a crutch for bad spending habits. It's all up to you.