People usually associate credit cards with wasteful spending, but you can actually save a significant amount of money if you’re careful and intentional with your credit card usage.
If you struggle with excessive spending, this post isn’t for you. You’d be better off reading about these tech tricks for saving money, these tips for being a smarter shopper, and these newbie-friendly personal finance blogs. Credit cards can be destructive if you lack basic financial restraint.
Otherwise, read on! These lesser-known credit card tricks and hacks may prove more useful than you think.
1. 0% APR Balance Transfers
We’ve all made money-related mistakes — such as putting way too many expenses on a credit card — and it can get to the point where debt repayment seems impossible. When the majority of every payment gets sucked up by interest and you can barely put a dent in your principal balance, the situation may feel hopeless.
0% APR balance transfers may be the answer!
Basically, you can search around for a new credit card that offers a 0% introductory APR for balance transfers, sign up for that card, then transfer your credit card balance to the new card. The introductory period usually lasts anywhere from 6 to 24 months.
You’ll probably have to pay a 3–5% transfer fee, but that’s way better than paying 20% or more in interest every month. For the rest of the introductory period, your payments will go entirely towards paying off the principal.
Here’s how good this is: For a $10,000 balance at 20% APR, you’ll end up paying $16,000 by the time you clear the principal. If you transfer to a card with a 5% fee, your balance becomes $10,500 without any extra interest if you can pay it off in time. That’s a savings of $5,500! A great tactic to use if you need to improve your credit score.
Be warned that most cards will retroactively charge interest for those introductory months if you don’t pay off the full balance before the introductory period ends!
2. Lower Interest Rate Requests
Did you know that 65 percent of people who ask their credit card providers for lower interest rates actually succeed? And did you know that 86 percent of people who ask for waived late payment fees also succeed? Yet fewer than 30 percent of folks ever ask for either of those things!
It never hurts to ask. The worst that can happen is . . . they say no. And if they do, then you’re in no worse a position than before. But if they say yes? Then suddenly you’ve saved a bunch of money. Even a few percentage points of interest can save you thousands of dollars in the long run.
And while we’re at it, ask your provider to waive any monthly or annual fees attached to your card. Again, the worst they can do is say no. But if they say yes? That’s one less money leak in your budget.
3. Price Protection
Imagine you bought a brand new jacket for $200, but one week later it went on sale and the price dropped to $130. Sucks, right? Some retailers may refund you the difference if not much time has passed (usually within a week or two). Some credit cards will do the same, and their policies are usually better.
For example, Discover offers 90-day protection up to a $500 difference on all of their cards. If you find a lower price at any store, you can submit a claim, at least until you hit the $2,500 annual limit. But think about that — a potential refund of up to $2,500 every year. Great for big-ticket shoppers.
Not all purchases are eligible, but the restrictions make sense. Examples of non-eligible claims: services, jewelry, floor or display models, employee discounted items, internet auctions, and other things like that.
4. Specialized Merchant Rewards
Cash back programs are great, and most people already know about them. But how you take advantage of different reward programs can make a big difference in how much you get back every year.
Certain cards offer super benefits when shopping at specific places. My Discover card has 1% cash back on all purchases except when I use it at Amazon, Sam’s Club, and department stores — where I get a whopping 5% cash back.
On the other hand, my Capital One card offers 1.25% cash back on all purchases. Obviously I should use my Capital One card for the majority of my purchases, but switch to my Discover card when shopping at those special places.
If you can sign up for a credit card that offers special cash back bonus rates for places where you shop often, you should consider it. Apply your cash back rewards to your payment balance every month and you’ll save a lot of money.
Just remember that cash back rewards only save you money if you were already going to buy the item in the first place. Buying more stuff just to get 5% cash back is wasteful!
5. Reward Malls
A reward mall (sometimes called shopping portal) is a website that offers special reward programs for shopping there, usually in the form of cash back or price reductions. They usually require an eligible credit card to participate.
For example, the Upromise Mastercard has an accompanying reward mall that offers a wide range of cash back bonuses: 7% for shopping at Travelocity; 6% at IHG; 5% at JCPenney, Walmart, Nordstrom Rack, and more. If you shop at those places often, you might as well do it through this reward mall.
Another example is the PayPal Credit Card, which has its own shopping portal with lots of great limited-time deals. At the time of this writing, I see things like a 10% discount on HP laptops and desktops and a 15% reduction on Apple Certified Refurbished products.
6. Free Checked Bags
If you travel a lot, you should consider getting an airline credit card if you haven’t already. When you do, look for the one with the best perks and rewards, such as free checked bags.
How much is a checked bag? On Delta, it’s $25. For a family of four, that’s $100, assuming everyone has a bag to check. Actually, it’s more like $200, because you want to fly back with those checked bags, right?
With the Gold Delta SkyMiles credit card, your first checked bag is free — and not just for you, but for up to eight other flyers on your itinerary. That’s a potential savings of $225 one way, or $450 round-trip. Incredible.
7. Insurance and Extended Warranties
When you buy electronics, you should always do so on a credit card. Two excellent reasons why: protections against damage and theft.
The next time you buy a device like a smartphone or laptop, you may want to skip the insurance plan. Unless you have a proven history of needing replacement phones at least once per year, the $100–$200 upfront cost just isn’t worth it — and that doesn’t even include deductible costs. For similar reasons, extended warranties aren’t great either.
But the real reason why you shouldn’t bother? Most credit cards come with purchase protection. For example, Discover has an extended warranty benefit that will extend any warranty by an additional year — but only if the original warranty term length is 36 months or shorter. MasterCard also doubles any existing warranties for up to one additional year. And at no extra cost!
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Between balance transfers, interest rate reductions, big cash back rewards, various protections, and nifty perks, you could easily save thousands of dollars every year. What would you do with that kind of money?
But as always, you should be careful when buying things with a credit card. Credit card fraud is always a risk, and even though most providers will rectify the situation without any penalty to you, it can still be a major hassle. Always be on the lookout for these warning signs of digital identity theft.
I’m sure there are a handful of other awesome credit card tips and tricks that I missed, so please share them in a comment down below! And if you have any questions, don’t hesitate to ask.