How to Save a Few Dollars Every Month with a Credit Card
5 Min Read | Published: July 5, 2023
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
You can save some money each month by maximizing credit card rewards and perks. Learn how cash back, partner offers, and other incentives can help.
At-A-Glance
- You can get more out of your everyday purchases, thanks to various credit card incentives.
- Different cards offer different cash back and points rewards accelerators. Choose the card that helps you earn the most rewards on your everyday spending.
- Interest-free options, like 0% intro APR offers, provide a cost-effective way to pay off big-ticket items over time.
What if you didn’t have to pay the full price on all purchases charged to your credit card? Of course, you’re responsible for paying back all charges you make. But many credit cards offer a small return in the form of rewards – usually cash back or points – on all purchases made. Some cards also offer valuable statement credits, partner offers, and other cost-saving perks worth exploring. Play your cards right and you’ll be able to use these benefits to save some money each month. Here’s how.
Earn Rewards on Purchases You’re Already Making
You’re already buying groceries at the supermarket and fueling up your vehicle. Might as well get the most bang for your buck by using a credit card that offers increased rewards on these common purchases. For example, a cash back credit card might offer 6% at grocery stores, 3% on gas, and 1% cash back on all other purchases. Other card offerings may include cash back on restaurant spending or streaming services. Cash back can then be redeemed toward statement credits – effectively lowering your monthly balance, and saving you a few bucks each month.
Some cards have rotating bonus rewards categories, so take note of the start and end dates. For example, if the card offers 5% cash back at home improvement stores from April through June, it might make sense to hold off on any DIY projects until then. If you spend $2,000 on a home project one month, that could mean $100 in savings.
If you’d prefer to earn points, some cards offer points rewards for everyday purchases, from gas and groceries to restaurant and travel spending. For most card issuers, points can be redeemed as statement credits, or they can be redeemed for travel purchases.
Regardless of your rewards preference, it’s key to pick a card that will help you get the most points or cash back for the everyday purchases you’re already making. Doing so is more likely to help you save money every month.
Get Statement Credits on Services You Use Regularly
From reliving the fun of TV shows you used to watch to discovering new shows, movies, comedy specials, and live sports, streaming services offer a wide array of entertainment options. And some credit cards now let card members get a monthly statement credit for subscribing to certain streaming services – a straightforward way to save some money each month on such subscriptions.
If you’re a frequent traveler, using a credit card that partners with a hotel or airline can be a smart way to save money during weeks or months on the road. Maximize savings by taking advantage of travel-related perks, such as free checked bags on flights, free annual companion tickets, discounts on in-flight purchases, airport lounge access, hotel statement credits, and annual free-night awards at particular hotels.
Always Check for Partner Offers
Credit card companies commonly partner with other businesses to offer cash back if you use your card to make a purchase with that brand. Keeping an eye out for these partner offers and enrolling in the ones that align with your everyday spending is another way to save a little extra money every month.
Available promotions vary by credit card, and they’re usually temporary offerings, but here’s a general example of what savings could be possible:
- Get $30 back if you spend $150 or more at a specific clothing store.
- Get $25 back on a specific yearly streaming subscription.
- Earn 10% back on purchases at a specific fast food chain, up to $3 back.
Some offers allow you to earn the perk multiple times, others are valid only once. Note that you might need to opt into offers by adding them to your card, either on your card’s online account or mobile app. Credits earned are usually applied directly to your statement balance.
Consider a Balance Transfer
If you’ve ever carried a balance on your credit card, you probably know about monthly interest charges. Avoiding that interest charge, or at least lessening its impact, is another way to save a little money every month. One way to do so is to execute a balance transfer at a lower interest rate. You may find such transfers available with your existing credit cards or with a promotional offer from a new lender. Balance transfer promotions often guarantee a 0% interest rate on a balance transfer for a specified time period. Others might instead offer a very low rate on balance transfers.
You may not notice the savings for the first month or two, though. That’s because balance transfers commonly include a one-time balance transfer fee. For example, if you did a balance transfer totaling $5,000 and there was a 3% fee to do so, the new total balance would be $5,150.
Even with the fee, transferring a balance from a high interest card to a card with a 0% balance transfer promotional period or a lower interest rate will likely help lower your total payoff amount in the long run, effectively saving you extra money every month until the balance is paid off.
Need to Make a Big Purchase? Use a 0% APR Intro Offer
A popular incentive is the introductory 0% APR offer for new credit card members. If you’re planning to make a larger-than-normal purchase, this can be a good way to lighten the total long-term burden on your wallet because it allows you to pay off the balance over time, without interest, as long as you pay it off before the 0% APR period ends. The money you’re saving by not having to pay interest charges can be allotted elsewhere – maybe a high-yield savings account.
The Takeaway
Credit cards may be a spending vehicle, but there are a handful of ways to benefit from such spending. By understanding the various ways in which credit card companies entice and incentivize you to use their product to buy your products, it can help put a few dollars back on your side of the ledger.
Michael Grace is a personal finance and technology freelance writer based in New York.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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