According to Lending Tree, Americans’ total credit card debt in late 2022 was a whopping $925 billion. That’s a huge number that’s making credit card companies wealthy as their customers pay exorbitant interest rates and other fees. But still, credit cards offer a wealth of benefits — if you know how to use them wisely.
Here are 5 ways buying with credit cards can save you money.
1: Travel Miles, Rewards, and Cash Back
The most well-known benefit of credit cards is their rewards system, often in the form of points, cash back, and travel miles. Many credit cards offer a percentage cash back on everything you buy with their card, while others provide rewards points or miles that can be redeemed for travel, merchandise, or even gift cards.
2: Fraud Protection
One of the best benefits of credit cards is fraud protection. If someone steals your cash, it’s almost impossible to get it back. But if someone steals and uses your credit card, it’s generally effortless to dispute the charge and get your money back. When your credit card detects fraud, the issuer will notify you via text, email, or phone. If you notice fraud on your account, it’s essential to report it immediately, as there may be a limited timeframe to report fraud.
3: Boost Your Credit Score
Responsible use of a credit card can help improve your credit score. When you make regular payments and keep your balance low, your credit utilization ratio will be low, which will help improve your credit score. Additionally, having a credit card with a long history and a good payment record
4: Extended Warranties and Purchase Protection
One of the best perks of using a credit card is its protection of what you buy – making those extended warranties at big box electronics stores unnecessary.If something you purchase breaks or is stolen, your credit card company may reimburse you for the cost of the item or repair. This can save you money on costly repairs or replacements and provide added peace of mind when making larger purchases, especially electronics or appliances. Of course, know what your credit card offers before assuming your purchases are protected. If you need help, call your credit card company and ask for details.
5: Access To Special Offers and Discounts
Some credit cards offer exclusive access to special offers, discounts, additional points, or extra cash back at certain stores and online retailers. These offers can provide significant savings and additional perks on items you buy. By taking advantage of these deals, you can save money on purchases and stretch your budget and credit card rewards further.
