5 Simple Ways to Save Money on Your Credit Cards

Credit cards can be expensive, but there are five ways to save money on your credit card bill every month.

Jan 12, 2014 at 2:00PM

Want to save money on your credit card bills? There are five simple solutions.

After a dip in their usage during the financial crisis, credit cards have continued to become popular again for all consumers. Financial reporting company Experian noted that the average balance per consumer in the U.S. stood at $3,779 in the first quarter of last year. Yet Americans everywhere can save money by following just one of these essential tips.

Images Of Money
Source: Images of Money on Flickr.

1. Take advantage of available offers
Countless companies now offer cash-back rewards on everyday purchases. Yet some companies offer variable ones that should be recognized and taken advantage of. For example, if Discover (NYSE:DFS) is offering 5% cash back on gasoline purchases, as it has previously done in the summer months, you should only fill up using that card.

Images Of Money

Source: Images of Money on Flickr.

Not only that, but Discover, Bank of America (NYSE:BAC), and other merchants will also offer rewards from specific merchants whether locally or nationally at the simple click of a button. Exploring the site of your credit card may be all it takes to put money back in your pocket on purchases you already make.

2. Understand the costs
Right along with reading the fine print is understanding the tangible cost of each card. While the difference between a 15% and 18% annual percentage rate (APR) may not seem like much from the outset, it can make a monumental difference if the credit card has a balance on it.

Carrying a $1,500 balance at 15% would be $45 cheaper over the course of a year than carrying one at 18%. If you had to pay an annual fee of $30 to secure a credit card with lower rate, you'd still end up ahead.

3. Pay bills on time
This should come as no surprise, but another essential way to save on a credit card is by paying the full balance on time each month. This eliminates the opportunity for banks to charge interest on the balances, but making late payments is a key contributor to lower credit scores, which leads to higher interest charges and fees.

Tax Credits

Source: Tax Credits on Flickr.

One late or missed payment on a balance of $2,000 could result in both a $30 late fee and another $30 in interest charges if the interest rate on the card was 18%.

In addition, borrowers run the risk of having not only the fees and interest rate increasing on the card with a missed or late payment, but also on their cards at other banks and credit card companies.

4. Use the tools the companies give you
Almost every bank or credit card company these days offers ways to analyze spending, which can provide a monumental benefit in understanding exactly where your hard-earned money goes. In addition, companies allow for automatic bill payments to help eliminate those late or missed payments, and even let you set how much of your balance you'd like to pay each month. Many companies too will allow for text message alerts that let you know when your monthly balance exceeds a limit you set to better control spending habits.

Gabriel B

Source: Gabriel B. on Flickr.

5. Don't hesitate to call
While customer service and leniency of each company varies, sometimes if a fee is charged after a payment is missed, all it will take is a simple phone call to customer service letting them know of the situation to see if the fee can be waived. Whether it is an error on their part or yours, calling in and asking the question is critical step.

From saving to investing
Although it may be tempting to spend all that money you've saved, the best thing to do would be to turn it around and invest it. With the markets going to new highs each week, many are beginning to wonder if they've missed out. But there's still time. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important, and what you need to do to get started. Click here to get your copy today -- it's absolutely free.

Fool contributor Patrick Morris owns shares of Bank of America and Discover Financial Services. The Motley Fool recommends Bank of America. The Motley Fool owns shares of Bank of America. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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