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Can the Right Cash Back or Rewards Credit Card Help You Save Money?

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Sure, a credit card can be a tool for smart spending. But what may not be as obvious is that it can also be a money-saving tool, if you have the right card and use it wisely. Below are some money-saving tips.

Think rewards

There are a bevy of reward programs that allow you to earn points every time you use your card. You can use points to offset the cost of travel, for example – or to buy retail items and services. The choices are typically broad; just check the card's website. Using rewards to score gift cards for popular stores can be a real money (and time) saver at big gift-giving seasons like the holidays, too. For many people, there's nothing better than a cash reward, and you can get that, too, with a cash back credit card, which pays out a percentage of a set amount you charge. That percentage varies from card to card, and sometimes, a few specific purchase types are ineligible for reward points. Double check what those are, if any, especially if you're counting on cashing in mostly with one type of purchase.

Charge everything–but only if you're disciplined

Think about charging most of your expenses in order to maximize credit card rewards – with a big caveat. You have to be careful that you are charging things you would normally buy, and not inadvertently strapping yourself at month's end. That said, many people do use their credit card for nearly everything, not only to maximize rewards, but for convenience as well. Although she had the savings put aside, Stephanie Wood has all of her son Anthony's college fees going straight onto her cash back credit card. "It's totally worth it," Wood says. Just make sure the college doesn't charge a service fee for credit card payment, which could negate any savings. Wood's daughter's private college did impose such a fee, but she was delighted to find out that Anthony's state school did not.

Try automatic online bill payment

Setting up regular online bill payments using your credit card may not only help you streamline your bill payments, it could also help you save money by increasing the amount you put on your card every month, so that you maximize your rewards.

For more ideas to maximize your savings, check out 7 Secrets to Shopping Smarter.

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