How to save money with a credit card
Some South Africans use their credit cards to buy things that they do not need and to spend beyond their monthly budget. This is the reason why cards do not have a very good reputation.
However, credit cards can actually help you manage your monthly budget and enjoy great savings if you use them correctly. They are just open-ended personal loan facilities that have to be used carefully and effectively just like all other banking products. If you get things right, you will enjoy more benefits than with any other loan product.
Use the following methods for saving money with South African credit cards:
Most credit cards in South Africa give you a fraction of the money that you spend back. You can readily use your credit card instead of your debit one to shop so that you generate reward points, which can be turned into cash or shopping discounts. With the reward points, you can get cheaper plane tickets, useful items like household appliances, books and DVDs.
The important thing is to pay off any outstanding debt within the set period. Otherwise, you will be charged interest on the spent amount and as we all know the interest rates in South Africa are among the highest in the world.
Keep a Positive Balance
Many South African Credit cards offer rewards for keeping a positive balance. Usually, it is in the form of interest which can be as high as 5%. It certainly makes sense to keep extra cash in your credit card as it is more flexible than a savings account while generating interest income.
You will not get charged any fee if you use your credit card for paying for purchases directly at the point of sale. At the same time, some debit cards do charge fees for this service. By using credit cards for paying at stores, you will save money.
Save on Insurance
Many South African credit cards come with included travel insurance. This means that you can save on a policy every time you decide to take a trip within the country or abroad. You can expect the insurance which you get with your card to be quite comprehensive. Typically, personal belongings and trip cancellations are fully covered.
Buy Products at a Discount
There are numerous South African credit cards that can give you massive discounts on special products. For instance, you can save as much as 20% on special holiday packages. It is important to note that these deals are exclusively available to cardholders.
The reality is that South African credit cards are great tools for saving. They can be bad only if you use them in a bad way. Make sure that you spend no more than you can afford to repay. Pay your monthly balance in full every month. Make full use of all opportunities for saving.