Chances are good you’ve heard lots of warnings about how expensive credit cards are. And those warnings are worth listening to. In fact, you absolutely want to pay attention to the high interest rates on credit cards and avoid carrying a balance so you don’t find yourself sending a fortune to your creditors each month.
But while credit cards can come at a big cost if you pay financing charges, they can also save you money if you use them wisely. In fact, here are five ways you could end up with more money in the bank by using credit cards.
One of the best ways credit cards save you money is by reducing the cost of your purchases. If you buy items you’d otherwise need but use a cash back or rewards card to do it, those rewards end up paying you back part of the money you spent. For example, if you have a cash back card offering 2% back on all purchases, you essentially get a 2% discount on everything you buy.
Credit cards provide you with strong protection against fraudulent charges. With most cards, you are not responsible for paying the cost of any unauthorized charges on your card. By contrast, if someone stole your cash, there’d be nothing you could do and you’d just be out the money.
Many credit cards offer various types of travel insurance. For example, you might get car rental coverage or trip protection insurance with your cards.
Since you might otherwise have to buy these types of insurance, you save the money you would have spent on them. And your card might offer insurance you wouldn’t necessarily have paid for that can save you a fortune if something goes wrong.
