Many people insist on using cash instead of credit cards when making a purchase. Certainly, using cash can provide a sense of comfort in knowing exactly how much one is spending and therefore manging his finances more closely. While this philosophy has its merits, it ignores the fact that using a credit card can give you a host of benefits. In fact, there are some expenses in particular that you should always pay for with your card. By doing this, you can save yourself a significant amount of money and also make several other types of gains. Here is a list of five different expenditures that fall into this category.
Some business owners, especially those with a traditional bent of mind, prefer to pay for their expenses by cash or by cheque. They think that credit cards are only for personal use and should not be used for official expenditure.
However, using a credit card to pay for your day-to-day expenses can actually be very helpful. A dedicated card can help you to keep track of every payment that you make. This can be particularly useful when it is time to file your tax, as you can use your monthly billing statements to compile your business expenses instead of spending hours looking for old vouchers and receipts.
Furthermore, there are specific cards that are designed to help you to manage your firm’s finances with value add services. For exmaple, Citi Purchasing Card provides access to Renepay, a cloud-based B2B procurement platform that can help you purchase various items at discounted rates.
Next time that you plan an overseas holiday or a business trip, you must use your credit card to book your flight tickets and accomodations. While credit cards come with various rebates and mile awards for your expenditures, travel booking is a category that card issuers have been particularly generous with in terms of their rewards.
For example, DBS Altitude Card is a great example of a travel card with a generous set of rewards. Not only does it provide 2 complimentary lounge access each year, it also rewards 6 to 10 miles per S$1 that you spend on large travel booking sites like Expedia and Kaligo. That's equivalent to helping you save 6 to 10% of your travel booking costs at minimum. This card as well as several other travel credit cards also come with free travel accident insurance coverage to their cardholders and their families.
In order to compete against one another and attract more customers, many credit card issuers have tied up with car rental companies to offer large discounts on car rentals. For example, Standard Chartered Visa Infinite credit card provides discounts of up to 37% with Auto Europe, which operates from 20,000 locations worldwide. American Express has tied up with Hertz to provide a complimentary membership to Hertz Gold Plus Rewards program to Amex cardholders, which entitles cardholders to 10% off on rates, free car upgrades, and other concessions.
Online and store purchases
Making a purchase on your computer from the comfort of your home is very convenient. But it can also expose you to online fraud. In an effort to address this concern, most card issuers offer to compensate buyers if their card details are used by an unauthorised person. For example, the American Express Online Fraud Protection Guarantee can be of great help if your card details get compromised.
Besides this, there are other benefits of using a credit card to pay for things online. While rebates and mile rewards for shopping are quite well known, there are other less prevalent but important benefits that you can take advantage of. For instance, American Express cardmembers are automatically insured against accidental damage or theft for 90 days for their online purchases. You may also be eligible for a 90-day return guarantee for the items that you buy. For eligible purchases, American Express will give you a refund even if the outlet from which you bought the item does not. Similarly, cards like Standard Chartered SingPost Spree Card provide online price guarantee that essentially ensures you get the lowest price possible whenever you shop online.
Any expensive purchase, but don’t forget to pay your bill in full
In general, it could be wise to pay for any large purchases with a card. Since most cards come with some level of cashback or mile rewards, making a big purchase is also an opportunity to earn a lot of card rewards. In particular, cards like American Express True Cashback Card or Standard Chartered Unlimited Cashback Card can be quite effective in earning savings since they provide an unlimited amount of cashback at a rate of 1.5% on all your purchases.
However, there is a big caveat to this principle. Although there are tremendous advantages to using your credit card to make a purchase instead of using a debit card or cash, you must pay off the entire amount in your monthly statement on a regular basis. Failing to do so and rolling over your credit card balance can easily wipe out all of the discounts and rewards you've earned, since card balances accrue interest at a rate of around 25% per year. As long as you use your cards prudently and you down pay your balance in full, using a credit card can make your free up both time and resources so you can do more with your life.