Whenever we ask someone about using credit cards, no one replies ‘to save money’, but they talk about fear of building debt, higher interest rate and other fees, etc. But it is a fact that wise use of credit cards can help you save money in many ways. And yes, you can do it effectively without getting into debt.
In this article, we will discuss a few of the many ways credit cards can save your business money while you are spending on daily business costs and expenditures.
Sign-up bonuses with new cards
There are companies that offer sign-up bonuses to their customers with new cards. When it comes to applying for a new card, lookup for a company that offers an attractive sign-up bonus. The bonus may range from cashback, free air mileages, hotel stays, and more. In some cases, the card provider may require you to spend a certain amount on the card to claim the bonus. For this purpose, you should read the fine print carefully to make sure you adhere to all the terms and conditions to claim the bonuses and save a big deal of business money.
Cash back is one of the common benefits offered by credit card providers. There are several cards that return a particular percentage of purchases through cards as cash back. Real savings come when credit card companies offer up to 5% cash back or more. They may offer cash back offers for specific shopping categories and selected stores. In order to save business money with a credit card, you should choose a card that offers the highest cash back percentage on a variety of purchases and payments.
0% introductory rates and balance transfers
Credit cards are usually known for high interest rates. But some credit cards are promoted as balance transfer credit cards that come with 0% introductory rates for a set period of time. Such cards are commonly used to transfer a balance from one or more credit cards to this card to consolidate debt and save a big deal of money in terms of paying 0% interest on payments. Balance transfer credit cards could be the best financing option for personal and business uses as they help users get out of credit card debt effectively without paying higher interest amounts. As a result, the user can save a lot of bucks while paying debt easily.
Build good credit to save on other loans
When used responsibly, credit cards can help you build good credit. Good financial habits like on-time monthly payments, and using a tiny part of the available credit limit can raise your credit score. As a result, you can secure personal or business loans on better terms and lower interest rates. A better credit score lowers the cost of other loans and it helps you save business money while financing day to day business needs and expenses.
Free Travel or Hotel Stays
Since credit cards come with plenty of benefits and enticing offers, you can save a big deal of money on travel and hotel stays. If your employees travel often for business purposes, you can save a lot of bucks every month by applying for a travel credit card that comes with free air mileages, and free or discounted hotel stays. Some cards allow you to earn free travel rewards that you can redeem later for free flights, hotel stays or taxi rental, etc. Even if you don’t have a travel card, you can earn free reward points on your existing card that are redeemable on travel and hotel stays. So, always make sure to check the list of discounts and offers before you make business travel plans.
Credit card could be the best financial tool for your business while saving a lot of business bucks every month. However, you should use your business card responsibly to avoid building debt. Experts recommend maintaining a credit utilization rate below 30% to build good credit and secure better loan deals in the future.