Saturday, 9 May 2020

7 Credit Card Hacks To Save Money While Shopping

7 Credit Card Hacks to Save Money While Shopping

I would not condone utilizing credit cards for shopping but I do actually see value as long as it is done correctly so in an effort to reduce financial harm, in this article I am going to share with you 7 credit cards hacks that you may not have been aware of that can save you some serious coins.


1. New Account Bonuses

Credit card companies love new customers, they love them so much, in fact, they are willing to provide big bonuses for those of you who open a new account. You can take advantage of these bonuses by just simply signing up for a new credit card for the express purpose of cashing in one the new customer perks which can be quite sizable, in fact, Capital One venture card, offers customers a sign-up bonus of 75,000 miles if you spend at least $3,000 over the first three months. If you take your required spending, your necessary spending each month you are going to spend more than $3,000 over the first three months. So those miles could then be redeemed for travel credit or exchange for goods and services that you might end up using eventually anyway.

It is important to be strategic when you open new accounts if you do it too often or you do it at the wrong time your credit can take a big hit due to that lack of seasoning on the account, meaning, the account is too young and the inquiry that come along with the application.


2. Do Not Redeem For Gift Cards

The reason is that the points per dollar ratio can vary widely. You might be able to say $100 gift card to the Banana Republic by cashing in your credit card reward and then the same rewards balance might only get you $80 for somewhere like Pottery Barn. Because there is not parity in gift cards that are acquired through the use of credit card rewards. So I just focus all of my effort on cashback and this year alone I have received nearly $500 in cash back so far.


3. Consumer Protection Policies

Take advantage of the consumer protection policies that are offered by credit card providers. Credit cards like the American Express gold card, the United Mileage Plus Club card, come with protection plans that will warranty your shopping against breakage or even theft up to $10,000, which is like getting a free shopping gift insurance policy.


4. Only Use Your Credit Card

Utilize your credit cards for all your shopping but only spend what you can immediately pay off. The best thing you can do with your credit cards is to always have them paid down to zero, in fact, I pay my credit cards to zero every single day, and since I am using my credit cards virtually every day for either Auto payments or typical day to day spending it means that almost every day I am applying payments to my credit card account to pay it to zero. 

This also requires me to go in and start looking through my transaction history and just verifying that everything on that account belongs to me. The other benefit of this is that it will report to your credit bureaus the lowest balance of the month which means that I will have near a $0 reported balance when the credit card provider provides that details to the bureau's, which will then maximize my credit score. This will keep you out of credit card debt. it enables you to utilize great perks that come with the credit cards.


5. Develop A Repayment Plan

Develop a repayment plan for all of your purchases before you ever make them. If you cannot afford to be going out and doing expensive shopping then you should not. The purpose of this article is not to help you get into a position where you are just barely scraping by and you are dealing with negative cash flow and you are spending more than you can afford. That is not the intent of this article, in fact, the intent of the article is to help you generate so much money and have such minimal liabilities that your cash flow is optimized, and you never even have to think twice about some of these coupon cutting scarcity-minded strategies.

I would rather you have an abundance mindset where none of this actually matters. but this hack here is especially helpful for those that need credit cards to just get through their shopping, but it is not something I would recommend and I know it is the way it is with many folks that are out there right now, and if you are somebody who only makes a minimum payment on your credit cards something I highly advise against, then it can take as much as 4 to 5 years to pay off a balance of only $1,000. And if you do this the interest that you are going to end up spending over that period of time could end up costing as much or even more than the total cost of your initial purchases. 

The key here is to have a repayment plan in place, setting automatic payments can be extremely helpful here. So I strongly recommend that you do that. 


6. Stack Rebates With Rewards

These are often two very different things, rewards are accumulated according to your credit card purchases. Rebates are issued through the retail partners that the credit card company has agreements with. And some of these might include Ebates or Evreward.com and cashback monitor. By doubling up on these perks you actually save a lot more money down the road. 


7. Utilize Rotating Reward

Stay informed on the rotating rewards categories for your specific credit cards, it is not uncommon for credit card issuers to incentivize different purchases at select retailers for a set period of time before moving on to a different retailer altogether. One month you might have a cashback perk that could take advantage of, you use your credit card says Costco and then the next month that same perk might be at Walmart. The key is just to know when these rewards rotate and modify your spending strategically accordingly.



Conclusion

Very few people take the time to learn how to best utilize credit cards in their possession and there are educators like Dave Ramsey who tell you to just simply cut them up. But with a basis of understanding of how to time your purchases, how to use the right cards, choose the best rewards options and have a plan to pay back your creditors, at every point, you have a balance so you maintain zero balances, you are using your credits as a strategic tool instead, and it will help you create wealth.  



Those are the 7 credit cards hack that can save you a lot of money on your purchases.

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