Five Ways Your Credit Card Can Help You Save Money

A credit card if used wisely can be a true friend in an emergency. Unfortunately, many people use credit cards to satisfy wants and not needs. Credit cards charge a very high rate of interest, around 24-36% a year. If you keep swiping credit cards for wants rather than needs, you will land in the debt trap.

Five Ways Your Credit Card Can Help You Save Money

1. Credit cards can fetch deals on e-commerce portals:

If you have more than one credit card, judicious use of these credit cards can fetch you great deals on e-commerce portals. Many e-commerce portals like Flipkart, Amazon, Shopclues have tie-ups with credit card Companies.

If your credit card Company has a tie-up with reputed e-commerce portals, you enjoy discounts; interest free EMIs and other bargains when you shop online. Check if your credit card has a tie-up with e-commerce portals and if you are eligible for any special deals.

2. Reward points on credit cards:

Credit card issuers offer reward programmes and you can earn rewards when you swipe the credit card at the POS to make purchases. When you swipe the credit card for a transaction, the credit card Company earns an ‘interchange fee’ from the merchant outlet. The Credit Card Company shares a part of the earnings with you in the form of reward points.

This is done to encourage you to keep spending so that the credit card Company earns interchange fees and you earn reward points. Some credit card Companies offer gift coupons instead of reward points. 

3. Co-branded credit cards:  

If you keep using certain services frequently like air travel, shopping at malls and supermarkets, frequent use of hotels and so on, co-branded credit cards can certainly help you. Credit Card Companies launch co-branded cards in partnership with airlines, malls, retailers, supermarkets, petrol pumps and hotels.

The reward points you get on co-branded cards are higher than most other cards. Reward points on co-branded credit cards can be 5-10 points higher than other cards. So, how do co-branded credit cards reward you? If you buy tickets of the airlines with which the credit card Company has a tie-up using the co-branded card, you get to enjoy reward points. If you swipe the co-branded credit card to pay the electricity bills, you will get less number of reward points compared to swiping the card at a hotel. This is because the credit card issuer earns higher interchange fees at the hotel vis-à-vis the power utility Company.

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Be Wise, Get Rich.