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Finances

Use Credit to Save Money

One of the common claims about credit is that it costs you money to use. While this is true in many cases, in some cases credit can actually save you money instead.

For instance, say that you have saved up money to make a major purchase. You have done your research, decided what you want, and have finally went to the store to make the purchase when the sales person makes you an offer to charge the item.

Don’t be so quick to brush away the offer. In some cases, these offers may come without any interest charges if paid off in a certain amount of time.

This is one of the tricks I learned about when I researched the habits of the wealthy. Instead of using their cash reserves to make purchases, they would instead finance things at a low or nonexistent interest rate. This would allow them to keep their money in the bank, earning interest…allowing them to make a bit of money.

I actually encountered that the other day. While my initial reaction was to refuse the line of credit, it occurred to me that I could place the money I’d saved up for the purchase in savings, finance the item for no interest, and actually come out a bit ahead on the purchase.

It may not seem like much, but these little decisions add up. Now, instead of being out the amount in my savings that I’d planned to spend, I will be able to allow that money to draw interest. While I’ll have to make payments on the purchase, I won’t have to pay anything for the privilege. This not only allows me to work on my goal of improving my credit, it lets me earn a few more dollars on my money that I wouldn’t have earned otherwise.

In many cases, these little offers are designed to be quick and easy to apply for, so they take very little time to secure. Just a couple minutes to fill out an application allowed me to increase my net work just a little bit more.

There is a caveat on some of these offers. Many of them are designed to encourage you to take out a credit card that you will be encouraged to use in the future. If you do use the card for future purchases, those purchases will be subject to interest charges if the bill isn’t paid promptly. That said, many places offer discounts if you use their cards to make purchases, but if you pay the new charges promptly, you come out ahead of the finance game as well.

Pennies make dollars, and even the smallest amount in a savings account can earn you a bit in interest. If you can keep your hard-earned cash earning interest for just a bit longer, your finances will thank you.

Have you ever accepted a no-interest credit offer in order to allow your hard-earned cash to continue building interest in your savings? Please share your stories in the comments below.