How to Use Credit Cards to Save Money (2024)

Credit cards are a type of unsecured revolving credit – they let you buy things now and pay later. Beyond that, they’re particularly helpful with managing expenses amid a cash flow crisis and, in some cases, they can save you money.

Experian, one of the major credit-reporting bureaus, reports the average American has 3.84 credit cards with an average credit limit of $30,365. When used properly, just one good one can make life easier and prove to be an advantage to your personal financial wellness.

Questions remain. How do you recognize a good credit card? What features should you keep your eyes peeled for? Is it even possible to save money by spending? Here’s what you need to know.

Making Credit Cards Work for You

So, you apply for a credit card with a bank, credit union or other financial institution. They check your credit score and credit report to assess your creditworthiness. If they accept your application, they will issue a card in your name that will give you purchasing power up to a certain dollar amount, known as your credit limit.

You may be wondering: how does using a card to pay what I owe save me money? After all, plenty of people spend more than they can easily repay and have the lingering balances to prove it. Well, we’re here to show you that saving money with a credit card is all in understanding a card’s particular features so you can use them to your advantage.

Cash-Back Rewards on Purchases. If you have to pay for something, especially if it’s a regularly recurring purchase or a larger purchase, why not make the purchase count in your favor? Some cards let you earn points for each dollar spent or may offer a cash back percentage for the total spent. Some cards may specify certain types of purchases to qualify, and they may change or rotate preferred categories like groceries, gasoline or dining, for example.

To cash in, you usually have to accrue a certain amount of points. Once you’ve achieved it, you can usually select how you wish to receive your reward: a credit to your account, a gift card to a preferred major retailer, or a cash deposit to your checking account.

Lump-Sum Bonuses. Credit card issuers want you to get their credit card. Even more, they want you to use the card they issue to you. To ensure that happens, they may sweeten the deal by offering a one-time bonus for using it.

Usually, terms specify that you must spend a certain qualifying amount within a specified timeframe. In return, they will give you a cash bonus for actually using their card. Many times, the bonus appears on your statement as a credit to your account, but some issuers may offer other options, too.

Balance Transfers. To broaden the use of credit cards, some issuers add the option of balance transfers for customers in good standing. A balance transfer offer typically comes with checks that you can use to transfer debt from one creditor or multiple creditors to your account with the credit card issuer offering the balance transfer.

The credit card company’s view is that if you already have the debt and are creditworthy, they’d like to help you manage that debt and any interest associated with it. Balance transfers may include a transfer fee offset by a low introductory interest rate.

Zero-Interest or Low-Interest Promotions. You may be able to take advantage of promotions where the credit card issuer will waive all interest or offer a very low rate of interest for a certain period of time. Ideally, the lack of interest payments allows you to pay off the debt within the promotional timeframe.

These offers are often linked with purchase windows so that all purchases made within a certain number of days or months will accrue no interest or only the low promotional rate of interest for a certain period of time.

Safety from Fraud, Disputes and Held Funds. While credit cards can make purchases quick and easy thanks to their universal acceptance, using a credit card for purchases also slows the actual payment process in ways that are favorable to the cardholder.

Using the credit card adds a layer before an expense reaches your bank account — a very significant layer that can give you a month or more before payment is due if the purchase is strategically timed. You have time to carefully review your bill and dispute any errors or fraudulent charges that otherwise might already be forever gone from your debit accounts.

Using a credit card can also be helpful in situations where a vendor may hold funds in reserve just in case. For example, some gas stations may place a minimum hold of $50 on a debit card purchase for 24 hours, tying up money in excess of the actual purchase amount.

While the last consideration applies to all credit cards, it reinforces the point of how the consumer protections associated with credit cards help to keep our money safe and the vendors we purchase from honest. Add to that some financially advantageous features, and you can indeed save money by using a good credit card.

La Capitol’s Cash Back Visa Signature Can Save You Money

Since we’re a credit union and not a bank, La Capitol Federal Credit Union offers a credit card designed to help its members — people just like you — make the purchases they need under great terms that can even put money back into their pockets. We created the Cash Back Visa Signature card, with all of the money-saving features our members want, to do just that:

●Earn 1.00 percent cash back on all authorized purchases of services or goods. Rebates awarded will appear as they occur on your billing statement and will be paid out quarterly.
● Collect a $150 bonus if you spend $1,500 in eligible purchases on the card within 90 days of your new Visa Signature Cash Back account opening date.
● Enjoy zero-percent interest for 12 months on new purchases made within 90 days of your account opening date. You can buy what you need, and as long as you pay it off within the 12 billing cycles, you can eliminate the interest.
●Take advantage of zero-percent interest on balance transfers for 12 months on balance transfers made within 90 days of your account opening date. It’s a great way to consolidate bills and devote payments to principal rather than interest.
●Relax with no over-the-limit fees.
●Keep using the card with no annual fee. In fact, it may well become your favorite, go-to credit card.

Build Your Buying Power with La Capitol

Choosing a good credit card means using a card that offers multiple ways to save you money with every swipe, and you don’t have to look far to find one. La Capitol’s Cash Back Visa Signature card offers 1.00 percent cash back on qualifying purchases, a $150 bonus, zero interest for a year on new purchases and balance transfers, and a whole lot of security and convenience.

Master the art of how to save money with a credit card!

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