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Save Money by not Using Credit Cards

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Save money by not using credit cards is an option if you are on a budget and finding yourself in debt. Credit cards often come with steep interest rates, which if you roll over your payments to the following month additional interest are added. In addition, most credit cards charge fees for using the cards, or will charge you interest on each purchase you make.

You can save money by not using credit cards. In the event your bills are due and you have no money, you can use your credit cards to pay the debt and avoid late fees, yet it is wise to payoff the amount as quickly as possible so that the interest rates do not increase.

We all want extra money to spend. If you save money by not using credit cards, you will have that extra cash each month to pay bills, buy groceries and perhaps take your family out to dinner. Imagine the amount you can save if you do not use your credit cards.

Having plastic often triggers people to buy what they want. You can save money by not using credit cards if you become aware of those triggers and avoid spending money for items unnecessary.

Tips for saving money: MasterCard’s and Visa’s are handy if you purchase the cards that you can add money to, since it helps you to budget and monitor your, spending. Yet, if you have credit cards, you want to payoff your debt each month. If you spend $20 for an item and make minimal payments, the interest will roll over and eventually you will pay double the amount for the items you purchase.

Avoid cash advances to reduce debt:

You want to avoid cash advances also. When you take cash advances against your credit cards the interest rates almost doubles. Since cash advances on credit cards do not have grace periods, often the interest accrues instantly.

If you are in debt save money by not using credit cards and avoid credit companies that claim, they can get you out of debt. Look for reputable companies instead.

If you are seeking credit cards and thinking of the pre-approved cards, think twice since most of these are hoax that begs you for upfront fees, especially those offering low interest rates and do not request annual fees. Likely, you will lose.

Also, avoid stapling your checks to vouchers for credit card payments. You could risk paying late penalties. Lastly, you want to avoid accepting additional protection on your credit cards. Many credit card companies will offer you additional protect, yet what most people do not know is that the government protects users of credit cards already.

Save money by not using credit cards is the best solution to help you stay debt free and to avoid getting in debt over your head.

8 Responses to “Save Money by not Using Credit Cards”

1. Dom Says:
   November 26th, 2008 at 7:37 pm

   Buying a house in January. Pay off 0% credit cards or save money for down payment?
   OKAY!!! Here we go!

   My wife and I want to buy a house in Sacramento in January but I am not sure what to do. Right now we have a combined usable credit from credit cards of about $80,000. Of this amount that we can use, we have $5980 in credit card debt with an interest rate of 0% that expires in March of 09.

   Our credit scores a half a year ago was 719 and 721. Since we last ran the credit report we have paid down our CC debt 30% to the $5980 amount I have mentioned.

   Now in previous situations with a 0% balance transfer card, I would pay the minimum and save the rest to gain interest. When the term is up, I pay the card off completely.

   1) So should I save my money so that I can put more down on the mortgage?
   2) How much will my credit score improve if I opted to pay all the debt and will it make a difference with the loan rate?
   3) Recommendations?
   By the way, DO NOT tell me about the dangers of credit cards. I know that already and my money is well managed. Just let me know about the question and that is it.

2. J. Philip Real Estate Says:
   November 27th, 2008 at 12:39 am

   If your balances are only $5980 out of an available $80,000, your balance % is low enough to not need to pay off those balances and take advantage of the 0% rate. Simply put, using less than 8% of your available credit is certainly good enough. Lowering that from 8% to 0% will not make enough of a significant impact on your fico score to justify paying it off. The money would be better served by going toward your downpayment.

   1) Yes, you should save the money and put it toward the down payment.
   2) Your score will improve by 5-10 points, but since you are already over 700 the improvement will be negligible, since most premium mortgage programs require a minimum FICO of 700.
   3) Stick with your plan and make sure that you get good rate quotes in writing from a reputable lender. Get a good faith estimate of your closing costs. Don't let them run your credit repeatedly, because that will lower your score. Enroll in a credit monitoring service so you can see your scores without a detrimental effect on your scores (checking your own scores is viewed differently than an application for credit.)Choose a good experienced agent with a track record and references to represent you in the search for that new home.

   Best of luck to you.
   References :
   real estate broker
   loan officer

3. Joseph, II Says:
   November 27th, 2008 at 12:41 am

   Seeing as how you seem to have a pretty good "handle" on your Credit Card situation (& KEEP it up- by ALL means!); I'd go for saving up for your Down-Payment on that House… Interest Rates are gonna start rising again pretty soon- as the Inflation from Oil prices starts to bleed into EVERYTHING we buy… So the MORE you can pay "upfront" on that House, the FASTER you're gonna be able to pay it off… Good luck!
   References :

4. Steph Says:
   November 27th, 2008 at 12:43 am

   Can't you do both?
   Save more for the downpayment but still pay some on the cards (and don't put more on them).
   For example I would do a 70/30 split.
   Say you and your wife save $100 each a week, so $200 total at a monimum. $140 for the down payment, $60 for the creditcard. So you will have $4600 by january 1st and $2000 off your credit card.
   If it were me I would try to double that amount.
   References :

5. Mike Says:
   November 27th, 2008 at 12:45 am

   It doesn't matter what credit you have available on your cards.

   Your down payment carries more weight than your credit score and your debt (to me at least) is low.

   The bigger the down payment generally, the better shape your in to get a mortgage, at the lowest rate.

   I would not pay off the cc, but save for down payment, research the best rate and check out banks with low fees, and make a good deal on the house.

   In fact, prices continue to drop, I would start looking now, and any house I would want to buy, offer 60-80 cents on the dollar.
   The market is desperate for buyers, lenders are not willing to lend, and you need to play hardball with the seller to get a good deal.
   References :

6. Melanie K Says:
   November 27th, 2008 at 12:47 am

   I would usually say to most people, it's better to get rid of the debt, but that's a lie. I would mostly say that to people who don't really have a handle on their credit cards.

   But to tell you the absolute truth –

   To have more money for the down payment is better. Just figure out the minimum you would need for the down payment and save up for that. When you reach the minimum, start taking chunks of the credit card.

   With your credit score, the debt on your card means almost nothing, but it's always nice to have it paid off.
   References :
   I worked at a bank and just recently bought a house myself.

7. RM Says:
   November 27th, 2008 at 12:49 am

   You are doing great with your money. Continue to pay the minimum payments on the 0% cards and use the rest of your extra income to save for the down payment on your home. Save as much as you can. Your goal is to have a large down payment so that when you make an offer on a home it will be a strong offer. Sellers like to see a large down payment because it indicates the buyer is serious about buying their home and can most likely get the mortgage for the home. When you are ready to buy it is important to get pre-approved for a mortgage that way you know how much house you can afford before you start looking. I wish more people handled their money the way you have been. Best wishes and good luck in finding your dream home. :O) As March of 2009 approaches pay the rest of the 0% balance off.
   References :

8. Rush is a band Says:
   November 27th, 2008 at 12:51 am

   You *need* to have a downpayment. The days of 0 down are long gone. In many declining markets (like Sacramento) you might even NEED 10% down. I would guess that 10% of a decent home in Sacramento is probably on the order of $20,000 to $30,000.

   I'm guessing that you really need to save for that downpayment.

   Credit scores of ~720 will qualify you for a mortgage and a decent rate. Above 720 doesn't really matter, but below 720 really does matter. My guess is that paying off the $3-4000 that you have recently paid off doesn't do too much to your credit score since your balance vs. credit limits are low and you continue to pay on time. I would check it every 3-6 months or so until you have your mortgage.

   You need a downpayment… (have I said that yet Only because that's the best way to get a mortgage today, not because having one will really reduce your payment by that much.

   Do you have any savings today?

   good luck!
   References :

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