5 ways to save and earn money with your credit card
Over the years, the demand for credit cards has gained much traction because of the convenience they offer to users. Not only do they provide instant cash, but new-age cards such as the Bajaj Finserv RBL Bank SuperCard also help you avail an emergency personal loan. When used smartly, credit cards can help you save and earn at the same time.
photo/ Michael Jarmoluk via pixabay
Here’s how:
- Pay outstanding amount within the interest-free period
Every credit card gives you an interest-free period during which no penalty is charged on the outstanding amount. It’s financially prudent to pay this amount within the interest-free period as penalty charges on outstanding dues of a credit card are high. Your credit score can also take a severe beating.
The interest-free period starts at the end of the billing cycle and differs across card issuers. For some, it may be 30 days, while for others it can go up to 45 days. Paying the borrowed amount within the interest-free period results in savings in the long run.
- Avail cashbacks and discounts on purchases
Today, several e-commerce sites and retailers offer cashback and discounts on purchases through credit cards. Such credit card offers help you save on your credit card purchase and also earn at the same time. You can sign-up for newsletters from e-commerce portals and retailers to know about such offerings.
Also, there are various cards tailored for specific purchases. For instance, while some cards give discounts and cash backs on fuel refilling, others offer rebates on purchase of air-tickets or groceries.
- Avoid withdrawing money from ATMs
Swiping credit cards at ATMs is different from debit cards. When you swipe your credit card at any ATM, interest is charged on the amount withdrawn instantly. Essentially, you don’t get the interest-free period that you would get otherwise.
Along with interest, service and ATM withdrawal charges are levied. All of these can make a significant difference to the final payable amount. However, credit cards like the Bajaj Finserv RBL Bank SuperCard offer interest-free withdrawal from ATMs for up to 50 days, charging a processing fee of only 2.5%.
- Transfer balance
By transferring the outstanding balance of the existing card to a different credit card issuer, you can save and earn simultaneously. Today, most credit card issuers in order to attract business, offer lower interest rate and cash backs on transferring the outstanding balance. Some even don’t charge any interest for the first couple of months.
However, it’s essential not to make this a habit as it can lead to a debt trap. It’s essential to pay the outstanding amount on your existing card within the stipulated date.
- Use reward points
Credit cards offer reward points when you use the card to make a purchase. The points can be accumulated and redeemed as per one’s convenience and needs. Redeeming the points can help you save a lot of money.
If you are a frequent flyer, some card companies allow you to convert these points into air miles and get attractive discounts on air tickets or any other activity during your travel.
These are some of the basic ways through which you can save and earn on your credit card. The right use of your card can help you improve your credit score, essential for availing loans in the future.
About the Author:
Rupesh Singh is freelance writer and founder of moneyoutline.com You can follow him on Google + & Facebook.
