With cashless payment options on the rise, credit card usage is becoming increasingly widespread. While credit cards have been traditionally associated with racking up huge debts, things don’t always have to go down that path.
Saving money with your credit cards might sound like an oxymoron, but the truth is that responsible credit card use lets you reap benefits that cash can’t match. Here are 6 ways you can save more with credit cards:
Decide on the best credit card based on your needs
With so many credit cards available in the market, which ones should you go for? Evaluate based on your lifestyle needs so you can go for the most ideal option.
If you’re looking to cut down on everyday expenses, your best bet could be a cashback card.
For the big spender or frequent traveller, you might want to consider a miles card so you can get that first-class ticket for free when you’ve accumulated enough miles.
To get more rewards, keep a lookout for sign up promotions offered by third parties including SingSaver and MoneySmart, with credit cards offering attractive incentives of up to S$350, Airpods, Samsonite luggage and more.
The reason why many people end up in credit card debt is because they tend to bite off more than they can chew. Since the amount is not physically paid in cash, some consumers may not feel the pinch of their purchases and in turn, feel encouraged to spend even more.
Avoid going down the rabbit hole by practising responsible credit card usage. A simple tip would be to always record your expenses so you will be confronted by your purchases immediately. In this way, you can review your purchasing decisions instead of waiting for the credit card statement to see your financial damage.
If you’re a more of the old school type, you can simply jot these down with a pen and paper in your notebook. Again, financial apps like Planner Bee work to help you track your expenditure effortlessly.
Use them for big-ticket items
If you’re planning a wedding, renovating your house, or intending to spend on big-ticket items, pay with a credit card to enjoy more cost savings.
Charge these expenses to a cashback credit card to get a significant amount back in cash rebates, or get rewarded with miles which could pave the way to your next complimentary Business Class flight out of Singapore.
If you own a new credit card, you could even enjoy a sign-up bonus once you’ve clocked the spending threshold.
Earn more cashback
Make sure you read the fine print of your cashback card so you can get the most out of it.
Most cashback cards have a minimum spend requirement and a cashback limit. While some cards might offer a generous 8% cashback, there are certain criteria you’d need to hit to achieve that amount of cashback. For example, some cards require you to spend a minimum amount of $2,000 in order to attain the full 8% cashback.
Pro-tip: Even if you’re unable to get the maximum cashback offered on your credit card, you can still stack cashbacks at selected merchants by linking your credit card to your ShopBack account, and making payment with the associated credit card in-store.
Earn more miles
On top of the miles that your credit card offers, earn more miles with apps like Kris+.
From shopping, dining to purchasing everyday items, you can link your credit card to your KrisPay wallet to get more rewards and privileges at selected partners. The KrisPay miles you earn for each transaction can later be transferred into KrisFlyer miles.
Don’t carry over your bills
When you receive your credit card statement at the end of the month, always pay off your entire bill in full.
You may have heard of the penalties if you’re late in making your credit card payments. If you miss the month’s payment cycle or fail to make the minimum amount of payment, this will incur a late payment fee.
For credit card newbies, there will be a ‘minimum amount’ segment in your bill, which is usually a specified amount of $50 or a percentage of your balance. Take note that paying off just the minimum sum punctually will still result in a monthly interest charge, compounded on a daily basis. This means that your outstanding balance may snowball into a terrifying sum over time.
Protip: Always track your expenses to make sure you have enough cash to pay off your credit card bills in full every month.
Use your credit card effectively
Treat your spendings on credit cards as real cash and charge it only when you know you have the ability to make full repayment. Responsible credit card usage allows you to build credit and earn significant rewards, so you can enjoy perks and avoid the downsides.