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Using a Credit Card to Save

There was a time in my life when I was completely anti-credit card. My day to day transactions were made with either cash or a debit card and a credit card was never even put into my wallet. This worked fine for a while, but then I began to realize two very important things. First, I was losing money by not using a credit card. And secondly, I was killing my credit score at the same time. This would inhibit me from getting a loan for a house and could even prevent me from getting the job of my dreams (as many employers gauge your character by pulling your credit score).

Today, let’s just focus on using a credit card to save money. There are three main ways that a credit card can save you some dollars: (1) buying products today with future money, (2) getting rewards for your purchases, and (3) using your credit card for a 0% interest loan.

Buying Today with Tomorrow’s Money

I am not a huge promoter of buying items with money that you do not have. But, for those of you that do have the money to buy a certain product, it might be a wise idea to keep your bank funds liquid and use your credit card to make the purchase. If you do not have to pay interest on your card, then you are using tomorrow’s money to make the purchase today, and since inflation is almost always rising, this action will save you money much of the time.

Earning Rewards

One of the best reasons to use a credit card is to earn cash rewards. Use comparison sites to find the credit card that is best for you (and that provides the most rewards). Many times, you can earn hundreds of dollars each year just by making your purchases with your credit card. It’s a pretty sweet deal for those of us that are responsible with our money.

0% Interest Loans

For those of you that just can’t wait for your cash to catch up with the price of a new car, a credit card might actually be a good option for you. Instead of paying 4% or 5% interest on a 60 month loan, you might be better off using your 0% interest credit card over the course of 24 months and paying off your car that way. This could save you over $1,000 on that brand new shiny car of yours.

Don’t continue through life thinking that your credit card is evil and that you should never use it. Heck, I’m signing up for another card in the next couple of days because I know it will improve my credit score. Since I plan to invest in real estate in the next couple of years, it is a good idea for me to watch my credit and make it look as wonderful as possible. This way, I will ultimately save on my business loan by being granted a lower percentage on my loan. By understanding your credit score, you could save yourself some serious money!

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My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

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