5 Ways to Save Money Using Credit Cards

There is so much negativity surrounding credit cards; and I totally get it. The average American household carries over $15,000 in credit card debt. When you’re carrying credit balance month over month, it comes at an expensive cost (interest). However, there are ways to save money using credit cards, once you do get to a place where your balances are non-existent.

There is a trick to using credit cards the right way. When you are able to do so, you can take full advantage and save a lot of money. I’m sharing 5 ways to save money using credit cards, once you get to a $0 balance place.

When Credit Can Work in Your Favor

Before I get to the juicy details of how you can save money using credit cards, I want to shed light on some of the ways credit can work in your favor. Of course, the best debt is no debt, but if you can manage your credit wisely, you can come out on top!

Large purchases

If you need to buy a new car, purchase your first home, or make a larger purchase for your business, credit can come in handy. If you don’t have the cash on hand, or if you want to keep your cash reserves, leveraging credit can help significantly. Just like any other debt, you’ll want to manage it wisely. Having the option to use credit when you need it for large purchases is always good.

Reward hacking

Reward hacking is a more advanced way to use credit cards. Beverly Harzog describes reward hacking best in her book Confessions of a Credit Junkie. Essentially, reward hacking is using credit cards (with rewards perks) to buy gift cards and then use the rewards to get gift cards and use those gift cards for everyday purchase.

Perks and saving money

Lastly, credit can work in your favor because it comes with perks and ways to save money. Some credit cards come with complimentary bag check fees when traveling, free rental car insurance, extended warranties and more. Make sure you are familiar with all of the perks that come with your credit card. You can also check out 10 Credit Card Perks to Take Advantage of.

Ways to Save Money Using Credit Cards

Interest free offers

The easiest way to save money using credit cards is by taking advantage of any interest free offers, especially if they are coming with a balance transfer. For example, if you are currently carrying a balance that is accruing interest, transferring that balance to an interest-free card will result in a lot of money saved, because you are no longer paying interest.

Interest free offers don’t just work for balance transfers. If you are looking to fund a large purchase and your credit is up to par, sometimes you can get credit with no interest. That allows you to keep money in your pocket while you pay down your large purchase interest free.

My mom is a perfect example. Her credit is so good that she purchased a brand-new car with 0% interest for 5 years. She didn’t have to tap into her savings, and she can pay the car off every month with nothing extra going to interest.

Use a cash back rewards card for all purchases
There are plenty of cash back credit cards out there, the Bank of America Cash Rewards being one of the most popular. Every time you make a purchase with your credit card, a certain percentage is given back to you in the form of cash. You can take a check, direct deposit, or apply it to your statement balance.

Ideally, you’ll be using credit that has no balances. Then, you’ll be paying all of your budgeted bills and expenses with the credit card. These are items you would have already spent money on, but now your using your credit card for them and getting cash back. It’s like everything you buy is now at a discount, just for using your credit card.

This only works if you’re not carrying a balance month over month (i.e. not paying interest) and you only spend what you can afford to pay off in full. The minute you over spend, it’s not worth the cash back you would be getting. The interest rate is much higher than the percentage of cash back you get!

Get free travel or travel discounts

You can score hundreds of dollars’ worth of free travel by using a credit card with travel rewards that ultimately gives you points or miles every time you use the card. Again, this is assuming you are paying the card off in full every month and not paying interest. If you like to travel, then instead of using a cash back credit card for all of your purchases, use a travel rewards card.

I’m one of these people – I love to travel, and any chance I get to travel I take it. That’s why I use the American Express Bonvoy credit card. I was an SPG member before it transitioned to Marriott Bonvoy. With this credit card, I get 6x the points for any charge at Marriott hotels, 1 free night every year, no foreign transaction fees, credit for TSA pre-check and so much more!

Leverage extended warranty features

Nowadays, most credit cards come with some form of purchase protection. This allows customers to repair or replace any damaged or stolen items free of charge. Usually, within 30-90 days of purchasing the item.

In addition to purchase protection, most credit cards come with complimentary extended warranty programs. This is outside of the normal manufacturer’s warranty and can add up to two years of additional warranty coverage. This can result in a lot of savings, especially if a faulty product is purchased.

Know all of your credit card perks

In addition to travel, cash back and rewards programs that most credit cards offer, there are a variety of other perks that come with being a credit card holder. While some of the perks vary between credit card companies, just being knowledgeable of some of the benefits of having a credit card can save you money, stress and time in the future. Do your research and be knowledgeable of the perks that come with your credit cards!

What to do before saving money with credit cards

Now that you know how you can save money using credit cards, it’s time to make sure you have all of the pieces in place to get started! As I mentioned earlier, saving money with credit cards only happens when certain conditions are met. Those conditions are:

  • Pay off any lingering balances so you can start fresh with your credit cards
  • Create a budget to understand what you can afford to spend and instantly pay off. Exceeding your budget will result in carrying a balance month over month.
  • Have funds set aside for emergencies. Should an emergency come up, you don’t want to use credit, as it will likely result in interest.

Related: 6 Benefits of a Good Credit Score


Saving money through credit cards is a very good way to take advantage of the perks of our society! Do you currently use any rewards or cash back cards? How do you manage and maintain them? Share your experiences and questions in the comments section below!

The CGS Team



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