Save money by paying with a credit card

For some people who can not manage their money, credit cards can be a one way road to debt. When the high interest rate kicks in, it can take a lot of effort to break the debt cycle.

For others, credit cards can save money. It can be a way to:

Rewards
Saving on fees
Invest money earlier
Flatten out 'cash bumps'
Easily make payments
Save up to $15.20 on a $1000 purchase

The great thing about credit cards is that they can give you a month to pay for items without incurring any interest and the seller will pay for the transactions.

Rewards

Most good credit cards offer rewards for using them. The rewards may be in the form of air travel, store vouchers, gift certificates or in some cases, cash. The reward is often of about 1% of the value of what you spend on your credit card.

For people who pay off their credit cards before being hit with interest, these rewards can be a great bonus.

Saving on Fees

Eftpos transactions are pay for by you, the buyer. When you buy an item on Eftpos, the bank will deduct a transaction fee of about $0.20. Over time this can cost you quite a bit.

Credit cards are different as the transaction costs are paid for by the seller. When you use your credit card in a store, the store pays the $0.20 transaction fee for you. So already you credit card may be saving you money.

When some credit cards offer rewards worth 1% of what you spend, they are in theory giving you a card that will get you a 1% discount on any item in any store. That stereo no long will cost $100, but only $99. (Hey it makes a difference)

Invest money earlier

Credit cards give you one month after making a purchase before they start charging you interest. This means that when you spend $1000 while out shopping, the $1000 will not leave your savings account for another month. As long as you pay off your credit card in time, you can invest that $1000 and make $5 to $10 before paying.

Flatten out 'cash bumps'

Things never go according to plan. Unexpected bills come up and this can mean that we go over budget some months. The power of the credit card and one month interest free means that you have a month longer to figure out how to pay a bill. This means that when you pay for $1000 worth of repairs on your car, you are not going to have to pay for the repairs until next month.

Easily make payments

When it comes to making payments over the phone or Internet, no other payment is as simple as credit cards to pay. By only typing in or reading out a number, you can pay a store anywhere in the world. Easily make payments over the Internet and phone