A credit card can be helpful little friend or a fiend that shoves you along the path to debt hell.
According to the website NerdWallet American households have an average of $16,061 in credit card debt, which is costing them an average of more than $1000 a year in interest charges.
Credit cards can be your friends
If you owe that average of $16,061 or even more in credit card debt those little pieces of plastic are not your friends. In fact, the best thing you could do is either cut them up or store them in a block of ice. Yes, you read that right. You should store them in a block of ice until you get all your balances paid off.
But credit cards can also be your friends if you use them sensibly, which means paying off your balances at the end of every month. They are your friends because of the seven benefits they offer that can save you money
It’s how you use them
Even if you’re using your credit cards sensibly there are things that you may not be thinking about when you reach check out that could cost or save you money. Before you next swipe a credit card keep these seven tricks in mind to make sure you’re not spending money needlessly.
Use sign-up bonuses to save money
There are credit cards today that offer very attractive bonuses. For example, the Discover it Cashback Match card offers 5% cash back in new bonus categories. The Capital One QuickSilver Cash Rewards Card comes with a $100 cash bonus after you spend $500 in the first three months. And the Wells Fargo Cash Wise Visa® Credit Card has a $150 cash rewards bonus plus unlimited 1.5% cash back.
Next time you’re in the market for an expensive item think about opening one of these cards as the bonus could definitely save you money.
Just say no to store warranties
Did you know that your credit cards probably come with warranties? Most of them have benefits that are built in and that will not only give you increased peace of mind when you make a purchase but will also save you money.
For example, credit cards typically include an extended warranty where the manufacturer’s warranty is automatically extended by a year or more. Some also include price protection. If you have one of these cards, you’ll never have to worry about missing out on a price drop or a sale after you make a purchase. The way this works is if you see the same product advertised at a lower price within a certain amount of time you contact the credit card company and request reimbursement for the difference. Some cards will even find price drops automatically for you.
Use different cards for different purchases
There are a number of credit cards available now that offer 0% interest rates to new cardholders. These interest-free periods can be anywhere from nine to 21 months. One of them can be helpful if you’re in the market for a big-ticket purchase and need to pay for the item over a period of time. Use one of these cards and you will not be required to pay any interest on the purchase – assuming you pay off the entire balance before your introductory period ends. As an example of this, if you’re in the market for a new smart phone that costs $700, you could pay for it with 21 monthly payments of $33.33 and because you wouldn’t be paying any interest you would save more than $200.
Take advantage of the card’s concierge service
Some credit cards now come with a free concierge service. If you’re looking for good deals on concert tickets, restaurants or travel, why do the comparison shopping yourself? Just call the concierge’s phone number, tell them what you need and the concierge service will probably provide you with a few options. If your card comes with this benefit you should be able to use it for restaurant reservations, concert tickets, travel plans and even shopping – which will save you from having to spend your valuable time searching the web.
Credit cards will protect your cash
If you lose cash, it’s gone. There’s just no way to get it back. Debit cards are a bit safer but they pull money from your checking account. This means if there are unauthorized charges put on your card you’ll be out of the money until the issue has been resolved. On the other hand, credit cards offer zero liability if unauthorized purchases are made on their cards. Instead of you having to wait for a refund or for your bank to resolve the issue, the credit card company will do the heavy lifting and resolve the issue for you.
There are some other important differences between credit and debit cards as explained in this video.
Save money with credit card shopping portals
Credit card companies have two simple goals. One of them is to get you to use their cards. To do this, some of them have shopping portals for their customers where you may find steep discounts and better rewards. As an example of this, you can have a credit card that offers 1% cash back if you’re buying something online but could get 5% cash back on the same purchase by shopping in the card’s store.
 Credit cards can help build your credit history
Assuming you use your credit cards responsibly they will help you build a good credit history. And the longer you use a credit card sensibly the better it will impact your credit score.
It used to cost to get your credit score. But you can now get it free with several different credit cards. Or you can get the equivalent of your FICO score at CreditKarma.com and CreditSesame.com. You may also be able to get your credit report at one of the sites. It’s important to know your credit history because this is what sets the interest you’ll be charged on auto and mortgage loans. The simple fact is that a good credit history will save you thousands of dollars in interest charges.
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at carry credit card debt, it costs them about $1,300 a year in interest.