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Did you know that the type of credit card you have plays a vital role in your financial wellbeing? Having a reward credit card can come in handy when it comes to cutting back on costs, but it also pays to know when and when not to use your rewards card. Here are tips that you need to know of when using your rewards card to access savings.
Checking if you have the right card
The type of card that you have can affect your financial wellbeing. It can also affect whether you end up paying more than you should or saving hundreds of dollars in the process. Check your credit card to see if it has features such as a low interest rate that can help you manage your repayments. If you are someone who is a big spender, then considering a rewards card can help you in the process of saving later on. It is vital that your card matches the amount that you are already spending or you could find yourself falling into a debt trap.
Compare, compare, compare
Compare various cards to make sure that you are getting the best deal for you. According to a financial wellbeing survey by ANZ, more than a third of Australians and New Zealanders are just ‘getting by’ financially. Two of the things that affected some Aussies reaching a healthy financial state was borrowing for everyday expenses and lack of savings. If you find it becoming harder to meet your credit card repayments, or that you are paying for features that you never use then it is time to switch to a new card.
Target spending to help you save
Building your rewards can take time, but there are a few ways that you can build it up to help you save on things such as shopping and travelling expenses. Reward credit cards come with the benefits of being rewarded $1 for each point. This can be accumulated through targeted spending such as knowing which shops, airlines, or restaurants that they have partnered up with to help you build up your points in a quicker way.
Invest in cash back cards
If you are diligent in meeting your credit card repayments every month and use your card according to a set budget, you could consider investing in a cashback reward card that rewards you back with a percentage of the amount that you have spent is paid back to your card. This can come in handy for 22% of Aussies that don’t have any savings saved up. Even if you have already set up a savings account, it can come in handy to add to it.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
