Today almost everyone has a credit card.  In fact, most people don’t ‘leave home’ without it.  It is convenient and you don’t have to carry a lot of (or any) cash when you go shopping.  And if cash is your first choice, credit cards can still be a convenient tool when you find a great bargain and don’t have the cash needed to make the purchase. The downside is that it lures you to spend. More.

Is there any way for your credit card to be a useful money-saving tool?

Yes, actually there are ways that a credit card can actually save you money.

0% Balance Transfers

If your present credit card has a high interest rate, you can transfer your balance to one with a low or no-interest rate. It can offer you a 0% interest for a certain period and then a lower regular rate once the trial period is over.  For instance, 19% interest rate can be transferred to one with 16.1%. The 2.9% difference can mean a lot, especially if you carry a balance and have to pay that interest on the balance month after month.

Lower Interest Rates

Look for a credit card with the lowest interest rate. Be sure you compare the ‘rules’ of use when doing your research. Lower interest rates can mean higher savings. And they can also mean added fees.

No Annual Fees

There are cards available that offer no annual fees.  Ask your banker or a trusted advisor for recommendations. Look online for cards with no annual fees.  Find out if there is a fee to transfer a balance.

Do your due diligence, don’t assume that the lowest interest rate is the best for you. Factor in your buying habits. You may be attracted to the low rates, but the end result may not be desirable if combined with the annual fees and other payment terms.

Rewards Program

Reward points system and cash back programs can also be enticing which can save you money. Maintaining a low balance despite your frequent buys could give you 1 to 5% in cash back rewards and points you can use to purchase airline tickets and more.

There are even cash rebates up to 5% when you use the credit card at certain gas stations, convenience stores and groceries. This can be automatically applied to your bill, saving you even more money

Maximizing the Options

Read the fine print.  Check the fees that may be charged and the penalty rates in case your payment is late. Some cards charge a late fee of $35 +. And cash advances can also be costly.  They can come with numerous fees and higher rates.

The bottom line is to read the fine print, do a comparison of each card’s fees and benefits.  Then you can make an educated decision about the best card for your lifestyle.