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How to Save on Credit Cards and Avoid Unnecessary Debt
from: Coupon WarriorsStatistics show that Americans and Canadians are in love with plastic, better known as credit cards. Nearly 81% of American households have at least one credit card.
Credit cards are seen as the most convenient tool for shopping and paying utility bills. They're so convenient that the average credit card debt racked up by Americans totals $8,000. That's a lot of individual debt.
If you want to avoid debts and save more on your credit card bills, 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. Get the type of credit card that will best suit your needs. This type of card will provide you the rewards, services, and interest rates for your particular needs.
For instance, if you want convenient shopping but can't afford to shop beyond your means get a credit card that offers reasonable credit limits. This will help you avoid the temptation to max out your card and accumulate debts you simply can't afford to pay.
2. Go for the lowest interest rate
You may be unable to pay your credit card bills on time but are willing to pay your balances in another payment cycle. In this case, consider getting a credit card with lower interest rates.
Consumers may be unaware of this, but one reason why debts are climbing higher is based on the interest rates. The actual balances are made worse due to the interest rate charges.
3. Choose the reward credit cards that suits your lifestyle
Avoid getting a credit card just because it can provide several rewards. Not all rewards are worth your time and money.
For instance, a frequent flyer's rewards credit card may not give you any rewards if you aren't a frequent traveler. However, if you are, obtaining a flyer's reward credit card will likely give you discounts in addition to points that can be converted into tickets. This can translate into worthwhile savings considering the prices of airline tickets today.
4. Keep a record of all your expenses
Credit cards may be convenient, but don't neglect your responsibilities. Keep a record of all your expenses. This will help you to identify unnecessary purchases, so the next time around, you'll know what to avoid.
5. Do not keep balances
Never let your balances stay on your credit card bill statements for too long. Do your best to pay any accrued balances for the month immediately.
Paying the minimum balance only won't do you any good. In fact, this could trigger further debts. Interest rates only apply whenever you have balances. Interest rates mean more expenses for you. Pay your balances monthly to avoid being charged interest rates, and enjoy more savings.
6. Be wary of cash advances
Except for an emergency, never take cash advances on your credit card. Financial experts say that cash advances reap higher interest rates compared to those on your credit card purchases.
The combination of cash advances and higher interest rates will definitely result in debt problems for you. Unlike regular credit card purchases, charges for cash advances will take place instantly. That could be expensive if you aren't prepared to pay off your balance immediately.
7. Ask for a lower rate
If you've been a loyal customer, paying your bill on time, you can call your bank or credit card issuer and ask for a lower rate.
Surveys show that nearly 55% of those who took part in the survey reportedly trimmed down their interest rates simply by asking their bank or credit card companies for a lower rate.
You can definitely save more with lower interest rates, especially if you're like many credit card holders who don't always pay their monthly balances on time.
All of these ideas and suggestions have been proven effective in helping to cut back on expenses and save more on credit cards. Now it's up to you whether you heed this advice or not. Your actions will determine the kind of life you want to live, so why not choose wisely and start saving now.
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