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How to get all the benefits from credit cards without it costing a penny

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There’s a large number of credit cards on today’s market, each falling into its own category that depicts the type of consumer it is aimed at.

For example, cashback credit cards are best suited to people that spend a lot using their credit card, as every time a purchase is made, a percentage is given back in cash which can soon build up.

On the other hand, according to the Money Hunny, anyone that currently owes money on a credit card as is paying interest should look into applying for a balance transfer credit card, as these cards allow you to freeze all interest against your balance for the number of 0% months on offer.

In the eyes of many, credit cards are the source of all evil – tempting us to spend money we don’t have, causing us to get into debt and triggering all kinds of problems. But anyone that knows a bit about the benefits that come with credit cards will know that if you are clever with your cards, they can in fact save you money.

All credit cards will help you to build up a credit history, so if you can demonstrate that you can manage your money effectively, you are more likely to be accepted for credit in the future, whether it be another card, loan or mortgage.

Below, I’ve added a few scenarios that would benefit from a credit card.

You owe £3,000 on a credit card and pay 16.9% APR – In this case you will save money by moving your debt to a balance transfer card. Customers must pay a small transfer fee, but this should not put you off as it is a one off charge of around 3% – significantly lower than the high interest rates on most standard cards. Once the fee is added to your balance, divide the total by the number of interest free months then set up a direct debit to pay this amount each month.

You don’t need a credit card to borrow money – this doesn’t mean you shouldn’t use on, in fact this scenario can be the most beneficial. By replacing cash and debit cards with a rewards credit card, you can quickly rack-up reward points that come in the form of anything from cashback, to airmiles.

You want to make some large purchases, but would rather spread the cost over several months – Purchases credit cards are designed to let you pay for things up front and pay them off later. These cards come with interest free months so you just need to make sure you clear your balance over the 0% period.

Category: Credit Card

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