Save with Credit Cards: Strategies Explained

“What??!” You might exclaim. “I have only heard of credit cards being a big trap for overspending, and you are telling me that you can use credit cards to save money?” Yes indeed. If you are careful with how you use your credit cards, these nice pieces of plastic can help you boost your bank account. Let’s check out some smart ways you can save with credit cards!

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1. Treat your credit card as your debit card

This fundamental view on credit cards is the cornerstone of responsible credit card usage. Although technically speaking, credit card issuers do allow you to borrow (i.e., use credit) to make purchases, at the end of the day, you are still responsible for paying them back. There is no free lunch in this world, and, after the typical 21-day grace period, you will be on the hook for all the money you spend.

The most effective strategy I find to curb the tendency to spend beyond my means is to view my credit cards as my debit card with modestly better rewards. I only allow myself to spend money on my credit cards when I have money in my debit card today to cover the expenses.

You may ask: What if I anticipate that I will receive a payment in the near future? Can I use my credit card today even though technically the payment hasn’t arrived in my bank account? Well, I recommend not to, because there could be unforeseeable circumstances that could potentially delay your payment. Something as small as a typo you put on the invoice could have a serious impact on when you receive your payment.

Remember that credit cards are not an extension of your bank accounts, and make sure that you only spend what you can afford.

One surefire way to make sure you treat your credit card like a debit card is to use a secured credit card like the Neo Secured credit card. It is a full-featured credit card with a revolving credit line based on a refundable security deposit. You can choose your deposit from as low as $50 to $10,000.

The card is good for car rental, hotels, groceries, anywhere credit cards are accepted!

Sign up for the Neo secured credit card here today!

2. Time your big purchases with signing up for a new credit card

Many credit card companies offer nice sign-up bonuses for new credit card holders. The sign-up bonuses typically include bigger cash or points rewards for all purchases in the first few months. By leveraging these extra bonus rewards for your big purchases, such as your furniture when you are moving into a new place, or tuitions, you are effectively paying less out of your pocket.

One important thing to note is that you big purchases must be items that you need to buy anyway. Do not make purchases solely in the pursuit of rewards, no matter how big they are.

3. Use credit cards to pay as many expenses as possible

This is again to leverage the rewards credit cards provide. Try to put as much expenses that you would otherwise pay with your debit card on your credit cards. Given the universality of credit cards, most of the merchants, whether online or brick-and-mortar, accepting them.

Additionally, more and more financial institutions and government agencies are accepting credit cards as valid payment methods, even for recurring expenses.

Some of the recurring expenses that you may consider putting on your credit cards include:

  • Cell phone bills
  • Electricity/water bills
  • Insurance premium payments
  • Internet bills
  • Mortgage payments
  • Property tax
  • Tuitions

Note that I find some agencies or governments are still quite stubborn that they only accept debit cards. Please get in touch with your local agencies first to find out if they accept credit cards. You will never want to have your water and electricity cut off because your credit card is declined.

4. Automatically deposit your cash rewards to your savings account

It is nice to see a small bump in your bank account at the end of the month or year with the cash rewards you have accumulated throughout the preceding time period. This is money you don’t expect to earn anyway, so why not redirect it to your savings?

The easiest thing to do is to set up automatic deposits so the cash rewards go directly into your savings account. Many credit card companies offer this service, especially if you use one offered by the bank and have a savings account with the bank. Call your credit card company to confirm if such an option is possible.

One extra bonus I find is that some credit card companies, in order to encourage savings (though ironically, they are in the business of making us spend money), actually provide incentives for users to set up such an automatic deposit. For example, my credit card company offers an extra percentage on my cash back rewards for one additional spending category upon signing up.

Treat your cash rewards as extra money towards your savings goals, instead of extra money that you can spend today.

5. If you are an international traveller, consider a credit card with no foreign exchange fees.

Foreign exchange fees can eat into your balance, especially if you travel internationally on a regular basis. On top of the currency exchange you will have to pay, your Visa or MasterCard normally charges you a foreign exchange fees in the range of 2 – 3%.

I personally use Home Trust Preferred Visa, precisely because of its zero foreign exchange fee policy. On top of that, this credit card has no annual fees, and also offers 1% cash back on all purchases through this card. For any one who travels one or twice internationally a year, this card is a great option to save you some foreign exchange fees.

One thing to note about this card is that the 1% cash reward is only paid out to you once at the end of the year. As a result, you are technically losing a bit on the compound interest you could otherwise earn if the reward was given to you every month. Nevertheless, using this card has saved me hundreds of dollars in foreign exchange fees that would otherwise cost me. Additionally, the psychological benefit of receiving one nice lump sum cash reward at the end of the year is worth talking about. It is more likely for you to put it towards savings than if the money trickles in on a monthly basis.

Of course, if you rarely travel abroad, or if your expenses are small while you are out of the country, then getting a new credit card solely for the purpose of saving 2-3% of foreign exchange fees may not be worth the hassle. But for avid international travellers out there, using a credit card with no foreign exchange fees is certainly worth the application process.

6. Use the benefits of your credit cards to their fullest potential

Many credit cards, in addition to offering the regular cash back or points rewards, also offer other side benefits. Benefits can include, but are not limited to, travel insurance, car rental insurance, etc. Make sure that you read the small pamphlets, or give the credit card company a call, to understand what benefits are provided by the credit card. This way, you can save money by not having to buy extra insurance, unless of course, that you prefer to carry two insurances for extra cushion.

Due to the complexity of insurance policies, you should make sure to read through the pamphlets carefully to understand what is and what is not covered.

Of course, a lot of the times, the perks come at a cost of an annual fee. You can use my credit card annual fee spreadsheet to determine if the fee is worth it for you.

7. Leave your credit cards at home

Due to the multitude of credit card promotions, you may already have a stack of credit cards piled up in your home. I recommend that at a maximum, you keep only one Visa and one MasterCard in your wallet, and leave the rest in your drawer at home. This way, you are not tempted by the total credit limits that you have with all the cards combined.

You do not necessarily need to cancel the credit cards if you can avoid the temptation. At the end of the day, all unused credits that are extended to you can help you with your credit score. The longer the credit card history, the better the card can serve you.

8. Use a plain-looking credit card instead of one with very unique designs

I find that a particularly visually appealing credit card can sometimes mask the credit card for what it is. Choosing a plain design may curb your temptation to be constantly taking the credit card out and using it.

Of course, there is nothing wrong with personalization, but perhaps it is not the best idea if it ends up subconsciously encouraging you to use the credit card more.

9. Use a balance transfer to reduce your overall interest rate

A balance transfer happens when you move the outstanding debt on one credit card to another card. It can help you lower your overall interest rate if the credit card you are transferring the debt to has significantly better benefits, such as a lower interest rate or a better rewards system. I have seen some credit card with an introductory interest rate of 0% or near 0% for the first 12 to 18 months. If your current credit card has an outstanding balance with an interest rate 20%, you can save quite a bit of money by initiating a balance transfer.

Note that some credit card companies charge a transfer fee (though some do waive it), so please make sure that you factor the cost in when you decide whether to initiate a balance transfer or not.

Of course, a balance transfer should be considered a last resort. Our goal should always be to have no outstanding credit card balances. As I said in the beginning of this article, we should treat our credit cards like our debit cards, and we should never spend money where we can’t repay.


Credit cards are a fantastic financial instrument that can actually help you save money, if you use them right. I hope you find the above pointers helpful. Leave me a comment down below if you want to share any other strategies you have used to save with credit cards.

Of course, this article is catered to readers who are active credit card users. If you are new to the credit card world and are wondering whether you should get a credit card to begin with, you may find this article, in which I detailed the pros and cons of credit cards, helpful. As well, if you currently aren’t able to qualify for a credit card, you may want to check out my post on how to raise credit score by 200 points so you can start taking advantage of this financial product.


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